Council tax looks likely to be frozen by Devon County Council, unlocking more than £8 million of Government cash which will help fund rural road improvements and services for the vulnerable.

The authority’s cabinet met yesterday, and indicated it will be part of a swathe of councils across Devon and Cornwall expected to take up a Whitehall offer of a one-off cash incentive which would be the equivalent to a 2.5 per cent increase in council tax.

Only two authorities in the Westcountry are expected to buck the trend by rejecting the Government’s incentive and instead increasing council tax in April. One is South Hams District Council, which will decide todayThurs whether to raise tax by 2.5 per cent. West Devon may follow suit when it meets later this month.

Yesterday, Devon County Council’s cabinet laid out its spending proposals in a tough financial year which is plagued with funding uncertainties. The council tax freeze incentive is a one-off payment, and some have warned of a funding shortfall in years ahead for those who take it up.

But Conservative council leader John Hart told his cabinet he was proud not to be presenting a “slash and burn” budget, instead pumping £5 million of the council tax incentive into highway maintenance on C class and minor roads, and £4 million for housing schemes for vulnerable people.

The cabinet is planning for spending in the second year of a four-year reduction in its overall grant from Government, which will decrease by 28 per cent in total.

The Conservatives are proposing a target budget of £507.5 million, a reduction of more than £20 million on the current financial year. Much of the saving has been achieved through reducing back office functions to maintain services on the front line, the cabinet was told.

Overall, staffing levels have dropped by 1,500 full-time equivalent roles since 2010-11.

But the cabinet plans to increase spending on services for children, the elderly and the vulnerable by £4.5 million, aside from the additional Government grant spending.

Part of the spending includes £3.8 million this year, towards a £10 million upgrade of Devon’s care homes over three years.

However, the combined services face funding requirements of nearly £16 million, and grants have had to be implemented to avoid jeopardising services.

Speaking before the meeting, Coun Hart said: “We always said we would do our utmost to keep the cuts to a minimum. He said the cabinet had “carefully considered” the council tax freeze incentive, particularly as it may not be repeated next year.

But he said: “By spending the money wisely and efficiently, we have been able to invest in our county but still freeze charges for our residents whose household incomes are under serious pressure. And, by using the money how we have, it will not be necessary to make cuts in the 2013/14 budget if the Government does not repeat its offer.”

Yesterday, the budget was broadly welcomed by opposition parties. Lib Dem leader Brian Greenslade said the council tax incentive spending was “sensible”, but warned caution about it not being available next year.

He said: “Given the struggle that everyone’s facing at the moment, freezing council tax is the right thing to do.”

But he raised concerns about cuts in home-to-college transport funding, and also in support for bus subsidies.

The budget will be determined at a full council meeting next Thursday.