Cllr Mike Hocking, of Berrys Wood, Bradley Barton, Newton Abbot, writes:

The £10,000 that Cllr Gadie alluded to in his letter is in fact a contingency fund, put into the budget in case of an unforeseen emergency or expense not allowed for in the council's budgetary forecast. This fund has been used in the past and I am sure will be needed in the future and to remove it would put pressure on the reserves, which are set at an audited minimum.

We must also remember that if we had removed the £10,000 as suggested by Cllrs Shantry and Gadie we would have had to reinstate the fund next year or make good the reserves, producing a larger increase in the precept next year than we have agreed for this. We have been in that situation before.

One of the areas we are advised on is the amount of reserves needed to be held in order to maintain a working council. in the case of Newton Abbot, the auditors suggested 50 per cent of the current budget – £240,000 approx. based on today's figures – but the councillors realised that this was unrealistic and agreed several years ago to hold 25 per cent £120,000 approx. based on today's budget.

The reserves in the past have not always maintained 25 per cent and we have been criticised for this and precepts have had to be raised to compensate.

The 2.06 per cent rise or £1.20 a year extra for a Band D home will maintain the reserves at 25 per cent equal to three months' working capital and still allow the council to continue to work for the benefit of Newton Abbot.

It must also be noted that most of the Newton Abbot town council committee budgets have indeed been frozen this year, apart from a small increase in the museum budget allowing them to continue to put on award winning exhibitions.

Finally, I know we are all aware of the influence and pressures inflation puts on a budget but I am sure with the saving we have made and will continue to make within the town council, the agreed below-inflation rise will not result in a reduction in the quantity or quality of benefits and projects that we, the town council, have worked for and will continue to work toward for the good of all the residents of Newton Abbot. MORE LETTERS IN OUR DIGITAL EDITION