Council tax discounts on second homes have been reduced

Senior councillors have approved plans for the council to re-invest its share of the extra money raised from cutting the council tax discount on second homes.

The move could lead to the council investing a potential �3.9m in local projects such as affordable housing.

But council leaders warned that the plans could be hit if the government capped the county council's proposed council tax rise of 5.25%.

The lion's share of any council tax cash automatically goes to the county council because it provides 80% of all local government services - such as schools, day care centres, roads and libraries - throughout Devon.

HOW AREAS MAY BENEFIT East Devon - �668,000 Exeter - �140,000 Mid Devon �104,000 North Devon - �391,000 South Hams �1.81m Teignbridge - �439,000 Torridge - �326,000 West Devon - �109,000

Senior county councillors want to ring-fence the extra money from second homes so that it benefits the district it was raised from by funding projects jointly developed with district councils and other partners.

County council leader, Brian Greenslade, who chaired the negotiations with the district councils, said: "These proposals are good news for local people and local communities.

"There is a broad consensus that the county and district councils' share of any additional money raised from second homes should be re-invested in funding schemes which meet local needs.

"My one concern is the risk of the government capping the county council's budget for 2004/5, which would have dire consequences for local services throughout the county."

The county council faces being capped by the government after agreeing a council tax rise of 5.25% on Monday.

The rate, agreed by the council's executive, is expected to be ratified by the full council next week.

Local Government Minister Nick Raynsford has written to the council, warning that he wants to see the tax increase by what he describes as "low single figures".