An additional £7million spending boost for vital Devon County Council services is set to be agreed.

Inflation-busting increases in spending were agreed by Devon's ruling Cabinet before Christmas.

But new announcements on funding were subsequently made by the government and councillors have now agreed to increase the budget by a further £7million, meaning a total boost of nearly £36million for under-pressure services.

The draft budget, unanimously agreed by the Cabinet, of £578.4million will now include an extra £35.6million for services where demand is consistently increasing, compared to the 2020/21 budget.

Cllr John Hart, leader of the council, said: "I'm very pleased to see increased targets compared to what we agreed in December of just over £7million.

"We have put more money into adult care and health and children's services and we have set aside £14.8million for COVID funding for the first quarter of the new financial year.

"We are also putting in £3.3million to fund the cost of the 2.2 per cent increase in the national living wage."

County treasurer Mary Davis said circumstances had changed considerably over the past month and that it was hard to imagine that a return to normal will happen quickly which had led to a review of the targets.

She said: "Some savings previously identified do not now seem feasible. Other areas need bolstering to increase the resilience of the council."

£14.8million has been built into the budget for COVID funding for first quarter of 2021/22, the meeting was told, with Cllr Hart saying that it will help us manage some of the risk.

Dr Phil Norrey, the council's chief executive, added that they were pushing very hard to meet every week with central government to move beyond emergency short term measures and sticking plasters funding to longer term recovery, but he added: "It is hard to get anything out and a reluctance to discuss it at the moment."

If councillors give final approval to the budget in February, it will mean an extra £21.6million for adult care and health and £11.3million more for children's services.

There will also be a £300,000 reduction to the highways revenue budget to £57.5 million, but Cllr Hart said this would be handled through the capital budget which would be debated in February.

It comes as the position at month eight for the 2020/21 budget see the council set to overspend by £1.9million, a reduction of £823,000 from month six forecast of £2.7 million, with Mrs Davis saying that if this overspending materialises then it can be accommodated by not making the full 2020/21 planned contribution to reserves which would leave the council in a break-even position.

But the Dedicated Schools Grant (DSG) projected deficit, relating to Special Educational Needs and Disabilities (SEND), is forecast to be £30.4million, an increase of £2.6million since month six.

Mrs Davis said that in line with Department of Education guidance this deficit will not be dealt with this financial year but carried to future years, but when added to the 2019/20 deficit of £19.7million, which was carried forward as a deficit reserve as per government guidance, the current year forecast the deficit is expected to be £50.1 million by the end of 2020/21.

She added: "Our hands are tied in the way we deal with the DSG in the way government has dictated. The service is currently developing a recovery plan for the overall DSG deficit for submission to the Department for Education in January 2021."

Cllr Rob Hannaford, leader of the Labour group said that the overspends were not as much as he was expecting them to be at this point, but added: "The DSG still going up and someone in Whitehall will have to bit the bullet on this as it is not a sustainable situation."

Cllr Alan Connett, Liberal Democrat group leader, added: "The DSG grant is real money that Devon County Council has spent. It is a debt that we are told to ignore but it does exist and does have an impact on us."