South Hams councillors are angry Devon County Council (DCC) is planning to spend an expected windfall from a new tax on second homes on repairing pot holes instead of housing.

From April next year councils will be able to charge up to 200 per cent council tax on second homes – and South Hams could reportedly raise about £6.48 million.

Councillors at South Hams District Council (SHDC) have said they want the additional revenue to go towards affordable housing schemes, with many also saying the money should be allocated exclusively to the South Hams area, as it has the highest number of holiday homes in Devon.

But at a council meeting last week it emerged that councillors have reportedly been sent a letter from the leader of DCC informing them that the extra revenue will be spent instead on repairing the highway and transport network.

SHDC councillors reacted angrily at DCC’s proposed plan. Conservative Cllr Nicky Hopwood said: “I would never in February 2024 have voted for 200 per cent council tax on second homes if I thought for one moment that Devon County Council would not ring-fence their allocation of the money for affordable housing.”

She said that as the district was giving “the lion’s share” of the money, it should stay in the South Hams “for South Hams residents”.

According to the Office for National Statistics (ONS), South Hams has the highest number of holiday homes in the South West, with the chief finance officer at SHDC placing the number at about 4,022.

By contrast, South Hams also has the worst affordability ratio in the entire South West, according to the ONS, with house prices reputedly increasing by around double the rate of income over the past 20 years.

Liberal Democrat David Hancock described DCC’s move as a “betrayal” of the people of Devon.

“They have an opportunity to address what they have declared as a housing crisis, and they have decided not to,” he said.

The matter has caused additional friction, as SHDC leader Julian Brazil revealed that he had previously “persuaded” DCC to ring-fence the second home tax windfall on affordable housing by agreeing to share the money with all borough councils, sparking another angry response from Cllr Hopwood.

She said she was surprised and “bitterly disappointed” at the way he had unilaterally negotiated South Hams’ position.

“The letter that was sent to all district leaders...doesn't mention any of that money going to housing, it mentions potholes, so they haven't listened to you anyway,” she said.

Councillors subsequently voted unanimously to lobby DCC to allocate all of the extra second home tax revenue towards affordable housing.

But the issue over who gets to keep the additional revenue may be a moot point as the majority of council tax goes to DCC, with the rest being redistributed on a proportional basis to Devon’s other districts.

Earlier this year, Totnes district councillor, John Birch, also explained at a local council meeting that SHDC would only only retain about eight per cent of the new tax.