FIRST, the good news:

North Devon Council — which saw £66 million pass through its bank accounts last year — is balancing its books.

But there is, unsurprisingly given the recent economic situation, a fair bit of bad news, although most of it is beyond the local authority's control.

The council's return on its investments in the financial year 2009/2010 was £600,000 lower than in 2008/2009.

The return was lower mainly because interest rates are lower.

What helps some people pay off their mortgages on the one hand, more quickly hammers public and private coffers on the other.

And income from services, such as planning, was £300,000 lower than in the previous year.

This was partly because of fewer large planning applications, which generate large amounts for local authorities in the boom times.

But perhaps the most significant problem, admittedly still some way on the horizon, is that the pension deficit has increased from £28.3 million to £45.1 million in just a year.

That gigantic widening — a 60 per cent rise within a year — of the pension black hole has been blamed on the downturn in the financial markets and lack of returns on assets as a result.

The council says it has a robust financial planning regime in place to cope with these serious problems and it is indeed on target to save £2 million between now and 2015.

The authority still has significant fixed assets, including buildings and vehicles, across the district, which are now valued at £76.9 million.

It is no secret the authority is not filling some vacancies, reviewing how much it saves (puts into its reserves), and looking closely for savings.

The council also has a strategy to bring about a "managed reduction in costs", which implies a "slash and burn" approach is not on the agenda.

There has been no suggestion that frontline services, such as rubbish collection and planning, will be harmed.

Unlike Devon County Council, there has been no talk — yet at least — of redundancies.

Last year the council spent £63.9 million on services. It had a gross income of £44.2 million, leaving a net expenditure of £19.8 million.

Overall, the council's net expenditure was £23.5 million. It couldn't meet the full cost of that, so was left with a £6.8million "deficit", which was partly filled by moving money from its general fund.

The deficit the year before was £4.7 million.

The biggest cost, in terms of net expenditure, was "cultural, environmental, and planning services", which took a £16.3 million chunk.

Although housing was the biggest gross cost, at £27.9million, the vast majority of that was paid for by central Government funding, so its net cost was relatively marginal to the local taxpayer (about £1.5 million).

In terms of cash flow, £14.2 million was paid to employees last year, compared to £13.8 million the year before, so although vacancies are not being filled, the staff bill rose by £400,000.

Council tax receipts fell slightly — from £5.4million in the previous year, to £5.3million. Business rates fell from just shy of £7million to £6.6million.

Those drops are in line with expectations given there has been a recession.

Meanwhile, about £264,000 of bad debts were written off.

The amount of money set aside from planning contributions (known as Section 106 cash) stands at £1,161,000 (the same as last year).

This money has been given by planning applicants in agreements when they were given permission for developments.

● See other panels on this page for more information about what North Devon Council spent in 2009/2010.