Teignbridge residents are likely to pay more council tax from April after the district council presented draft budget proposals.

The council plans to increase its share of the tax by £5 – the maximum allowed by the government without going to a referendum – when it finalises its budget for the 2022/23 financial year in the coming weeks.

It would see the annual payment for a band D property rise by 2.78 per cent to £185.17. This is only around nine per cent of residents' total council tax bill and is separate from the part of the tax that goes to Devon County Council, the police and the fire service.

The rise, a decision broadly taken by local authorities across the country, comes as they continue to tackle cost pressures from inflation, and reduced revenue due to Covid and lower government grants.

The draft budget includes plans to increase parking charges in most car parks and to introduce all year-round fees to those of them that are currently free or have only 'summer' charges at present. More details will be released soon.

A presentation by finance officer Martin Flitcroft to the council's overview and scrutiny committees said balancing the budget "continues to be the most difficult financial challenge we have ever faced."

He warned that while the council could manage its financial position in the next couple of years through savings and the use of reserves, there is a projected £2.7 million black hole in the budget in 2024/25.

"That's going to be highly challenging and we're going to have to make some difficult decisions in the future around how we operate services," Mr Flitcroft added.

A report on the council's finances said: "The economy remains turbulent due to Covid and the uncertainties continue about future demand, supply and outcomes now that we have left the European Union.

"Teignbridge has seen significant losses in income over the last 18 months – in particular from fees and charges – the largest losses being leisure and car parking, rental income has also seen significant reductions.

"Some good recovery has taken place in specific income streams but still well below pre-pandemic projections. The new Omicron variant is likely to provide further uncertainty."

Explaining that government grants had reduced by 37 per cent over the past five years, the report added the budget proposals show "how Teignbridge can start to prepare for the grant reductions, anticipated funding regime and losses in income due to Covid by continuing to make savings and generate income."

The executive approved the draft proposals. The overview and scrutiny committees also backed the new council tax base of 49,633 properties.

Further discussions will take place before councils receive their final settlements from the government at the end of January. Final budgets will then come before Teignbridge's executive and the full council next month for approval.