Charges for using Exmouth's car parks are set to rise by a fifth – but not until April next year.

East Devon District Council has agreed to put the hourly tariff up from £1 to £1.20 in the Imperial Road, Imperial Recreation Ground, London Inn, Beach Gardens, Queens Drive, Queens Drive and Queens Drive Echelon car parks.

Several other council car parks in East Devon's towns are also affected.

The recommendation had initially come from the council's car parking TAFF and scrutiny committees, with a proposal that the charges were introduced from April 2021.

But Wednesday's full council meeting voted to delay the rises until 2022 to help town centres recover from the coronavirus pandemic, as they felt that price hikes just as the area comes out of lockdown would be a mistake.

The decision to delay the rise by a year will leave a £300,000 black hole in East Devon's finances that will either have to be filled by cutting back on other services, or reducing the reserves to the bare minimum level that they can hold.

'Why would we nudge people out of the town centres?

Cllr Paul Millar proposed the delay in implementing the increase.

He said: "For the last 12 months, we have given grants to keep businesses alive. At this crucial stage when businesses have narrowly survived going under and gone through a mountain of hell, why would we let them fall the moment they approach the finish line, and why would we nudge people out of the town centres?

"We need to encourage them back to high streets and town centres after the year of getting into the routine of online shopping. For the next year, the savings should be made elsewhere and this can be done, and for one year only. Raising the charges has to happen, but doing it in less than two months' time is the wrong thing to do, and we can delay the increases until April 1, 2022."

Cllr Jack Rowland, the council's portfolio holder for finance, said: "It is important to remember why we are doing this. We are having to fill a gap of £300,000 which will diminish our reserves to the absolute minimum. We have to do this but doing it this year is not the best way forward, but next year, we will have to"

He said that he realised the inherent risks of reducing the council's reserves and said the danger was if they are hit with emergencies or extraordinary requests, they will have to look at how the money is raised or defer services.

But he added: "I feel this is wrong time because of the highly unusual circumstances we are in to increase car parking charges. There will be a certainty about next year, reserves are there for a reason and ideally are not taken to a minimum, and if we are faced with emergencies, have to think about the impact and the decisions that we will take."

Cllr Sarah Jackson added: "Unfortunately I appreciate that there will have to be rises in car parking, and we haven't put them up for years, so we are at the point where we have to generate some revenue somewhere to support our services. But I welcome the deferral for people to get back to some normality and back into work and they were face additional financial pressures, so it is sensible to defer it but we need to be clear there do need to be some rises."

Concerns over using the council's financial reserves

But Cllr Ian Thomas felt that delaying the rise for another year 'bordered on irresponsible' due to the fact it would cut the reserves of the council down to the absolute minimum.

He said: "This a shortfall of £300,000 in a £9m budget – over three per cent of the total budget. How does the administration intend to make £300,000 this year, or is it taking the reserves down to the absolute minimum? I think that borders on irresponsible and is a risk far too far.

"We bottled the car parking issue 12 months ago and it was a great disappointment. We have sailed close to the wind and on this we are sailing close to the wind into the eye of the storm, and that is irresponsible for a public body. In a time of enormously uncertainty, it doesn't take much of a jolt to put a significant threat to the revenue budget."

And Cllr Tom Wright said that while it was sensible to delay the rise, it was unwise to decide now what the increase it 2022 would be, with Cllr Philip Skinner adding that it was unknown what the situation next year would be.

Councillors voted by 36 votes to 17, with two abstentions, with support from all political parties across the chamber, in favour of the 20 per cent car parking charge rise, which will take effect from April 1, 2022.

The other car parks affected are:

Sidmouth: Roxburgh, Ham (East and West), Manor Road, Mill Street and Manor Pavilion car parks.

Honiton – Lace Walk, King Street and New Street (North and South),

Beer – Central and Fore Street

Budleigh Salterton – Rolle Mews and Lime Kiln.

Proposals from the TAFF over the introduction of an evening parking charge of £1 and for a Sunday parking charge to be introduced in Ottery St Mary, Honiton and Axminster will go before the council's cabinet on Wednesday, before they will make a recommendation to the next full council meeting for a final decision.

A rise in the district's share of council tax

Wednesday's meeting saw councillors agree to raise council tax by £5 a year – up to £151.78 for the average Band D property – as part of budget proposals that were agreed by 54 votes to one.

But Simon Davey, strategic lead for finance, said: "The budget includes an increase in prime car park charges and permits which generates £300,000 in additional income for 2021/22. Should the council not accept the increase in charges, the General Fund Balance will have to make good the loss of £300,000 and proposals would then have to come back how savings could be made to meet this not insignificant gap in the underlying budget."