Deficits already predicted at Devon’s newest political body

Deficits have already been predicted at Devon’s newest political entity as efforts ramp up to push Westminster for more cash.

The levels of government funding given to the Devon and Torbay Combined County Authority (DTCCA), which was formed just over a year ago, have meant it is already predicting it will fall into a financial deficit in the coming years.
Officials expect deficits of £317,000 and £495,000 in the next and subsequent financial years, respectively.
Even though senior staff believe these predicted deficits could be reduced or balanced out with new income streams or cash reserves by the time the 2027/28 and 2028/29 financial years arrive, there are now efforts to urge the government to provide it with more funding.
The CCA has £390,000 to fund its operations from Westminster in this financial year, but is predicting its running costs will be around £962,000.
However, thanks to the likes of interest earned on unspent cash and potential fees it could receive as part of government grant funding for specific projects, the body’s total income this financial year is predicted to be just over £1 million, meaning it can produce a balanced budget.
But the reliance on factors beyond government funding is already pretty stark.
Balancing budgets
In a March report, the DTCCA predicted that in its first full year of operation (2025/26), its costs would exceed the levels it had expected to spend by more than a quarter-of-a-million pounds.
That figure was heavily skewed by an unexpectedly large audit fee – £215,000 compared to the £40,000 budgeted – that the body may challenge or try to reduce next time.
Largely one-off expenditures on IT licences and preparation work for it taking on transport authority duties didn’t help either.
Thankfully, though, the likes of interest on its cash balances – totalling more than £450,000 if those brought forward from 2024/25 are also included – meant its income was expected to surpass its costs, providing it with a surplus it can transfer to its reserves.
But some suggest this is unsustainable or unfair, given equivalent authorities with a mayor not only get far more operational funding – around £2.5 million compared to the £390,000 for DTCCA – and can precept from council tax bills, gain access to mayoral grants, and borrow money.
Rising friction
The DTCCA, which was purposely created without a mayor, cannot do those things, apart from borrowing cash specifically for transport projects.
Technically, both Devon County Council and Torbay Council are liable to cover any shortfall in funding at the DTCCA, however, no official request for cash has been made.
Such moves would likely be contentious, too, with Councillor Julian Brazil (Liberal Democrat, Kingsbridge), the leader of Devon County Council and vice chair of the DTCCA, recently stating he would “not be prepared for county council taxpayers to be funding [the CCA] until we see tangible benefits from it”.
He added at the recent DTCCA board meeting that he would sign off the budget this year, but would “not be signing it off next year if it includes funding from the county council”.
Cllr Brazil’s opposite number at Devon, the Reform UK leader Councillor Michael Fife Cook (Yelverton Rural), also a member of the CCA, echoed the sentiments.
“What concerns me, besides the size of the [predicted] deficits is the message it sends,” he told the March authority meeting.
“If we are asking other authorities to subsidise us, then if I was one of those, I would be asking whether we would be getting value for money by supporting the CCA.
“So have we [the CCA] done our due diligence, or are we paying more than we should, and that’s what concerns me.”
To ease minds, Anne-Marie Bond, the chief executive of the CCA and Torbay Council, told the same meeting: “While we are all disappointed with the settlement from government and the small sums allocated, our lobbying efforts are continuing.
“Both our director of operations [Sean Anstee] and myself have met with the Ministry for Housing, Communities, and Local Government officials on a number of occasions, and they are aware of the challenge for us, and are seeking solutions but we don’t have those yet.”
Ms Bond stressed there would be another opportunity to raise the CCA’s plight with Whitehall in April.
Prosperous routes
A proverbial yellow brick road to more funding could be to become a mayoral authority.
While there are possible routes to achieve this, which would likely mean securing more government cash, such aspirations are complicated by the fact that Plymouth opted not to join the CCA at the outset, and having a mayor for Devon – but excluding its western city – is viewed as undesirable.
The CCA was created through secondary legislation, and so changing its model may require alterations to that.
Again, not impossible, but an impediment to a smooth journey towards a mayoralty.
However, officials inside the CCA state that with the government’s suggestion that it could green-light similar foundational non-mayoral authorities around the country, this could accelerate a renewal of funding arrangements.
Critics of the DTCCA can be incredulous about the levels of funding it has secured compared with the promises made by Westminster at the outset.
Highways funding, for instance, has largely been equivalent to what Devon County Council and Torbay Council would have received anyway, some claim.
But proponents highlight a key positive factor of the CCA – notably the control of where the money is spent.
An example is adult education and skills funding. A previous £13.4 million for this would have been dictated by Skills England, but the CCA could decide where and how it was spent.
And the CCA recently received £9.4 million in skills capital, which Devon institutions would previously have had to try and bid for from a national pot. Now they have a greater chance of bagging some cash because they’re making applications directly to the CCA and not Westminster.
Elephant in the room
An arguable problem for the DTCCA is that few of Devon’s residents may be aware of its existence, partly because it is little over a year old and doesn’t hold elections.
Its members are selected from the councils it represents – Devon County Council and Torbay Council – while Devon’s eight districts are represented via two board seats.
The organisation was officially formed in February 2025, just after the government announced local government reorganisation (LGR) at the end of 2024, with a remit including economic growth, skills and training, housing, and transport.
It is not entirely certain what would happen to the CCA if one or both of its constituent councils were eradicated in the forthcoming overhaul of local councils.
Ministers are pursuing LGR to eradicate the two-tier system of local government, which involves residents in one area receiving services from two different councils.
Plymouth and Torbay are already unitary councils, which perform all services for their residents, and the government wants all councils to be formed this way.
This means that Devon County Council in its current form is unlikely to exist post-LGR, meaning that one of the CCA’s founding members could disappear and be replaced by one or more unitary councils.
After an inauspicious start for the CCA, its funding and formational factors look set to make its future prospects intriguing.