�9m black hole in Waveney finances

Hayley MaceA last-ditch call for help to avert a financial crisis was issued by Waveney council today amid increasing fears of a �9m black hole in its budget and its impact on key projects across the district.Hayley Mace

A last-ditch call for help to avert a financial crisis was issued by Waveney council today amid increasing fears of a �9m black hole in its budget and its impact on key projects across the district.

The extent of the problems is laid bare in a new report to councillors which says even the future of the �52.7m Waveney Campus development is uncertain.

It comes as a long-running row with the Department for Work and Pensions (DWP) deepens over its attempts to claw back benefit subsidies.

Emergency measures are set to be taken to try to prevent service cuts and save major projects after the council was told it needed to provide even more information about alleged overpayment.

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Earlier this year the council was handed a bill from the DWP after the Whitehall department calculated that the council had been overpaid �8.9m in subsidies between 2004 and 2007.

Despite hopes that the amount would be reduced after months of work to provide information and evidence, the council is being forced to prepare for a potential budget deficit next year because the DWP has asked for even more data to be provided by January 8.

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Now there are fresh fears that it will be too late for the council to produce a balanced budget for the coming year and ensure certainty for the future of key projects, including the �52.7m Waveney Campus development.

Council leader Mark Bee said: 'This council has worked tirelessly in the last 18 months to put ourselves back on a more sound financial footing.

'The issue with the DWP remains an albatross around our necks and the latest correspondence from them, delaying any decision until the New Year, is a blow from which we are all reeling.'

The council's financial officers have had to produce a section 114 report which means they cannot authorise spending on new projects until a balanced budget is produced - and that report will be presented to members of the council tonight.

The council had a similar report last year because of the anticipated budget shortfall caused by the ongoing debate with the DWP, which centres on the fact that the council has been unable to account for some benefits payments made to residents.

The council insists it has not overpaid funds and the discrepancy arose from a failure to transfer data from paper records to a computer.

Heading into another year of financial uncertainty in 2010 leaves a dark cloud over many ongoing council projects including plans to redevelop the Water Lane sports centre in Lowestoft and urgent repair work to Southwold harbour wall.

Mr Bee said the council had now asked DEFRA to take on overall responsibility for the Waveney Campus project as it would house hundreds of staff from the Lowestoft-based Centre For Environment, Fisheries and Aquaculture Science (CEFAS) laboratories.

A DWP spokesman said: 'The DWP has a duty to ensure local authorities administer taxpayers' money in line with the regulations. Failure to do this is taken seriously.

'However, local authorities are free to propose how they intend to repay amounts identified as overpaid subsidy and the DWP can take into consideration the wider financial impact on the local authority.'

Mr Bee and the council's chief executive Stephen Baker are planning to meet representatives from the DWP and DEFRA as well as the Department for Communities and Local Government as soon as possible.

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