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Waveney council's new hope of avoiding cash crisis

PUBLISHED: 10:00 07 August 2009 | UPDATED: 11:22 06 July 2010

A crucial step forward has been made in a council's battle to avert a financial crisis after being ordered to repay nearly £9m in overpaid benefits.

In March, Waveney District Council was handed a bill from the Department for Work and Pensions (DWP) after it emerged the government department had calculated the council overpaid £8.

A crucial step forward has been made in a council's battle to avert a financial crisis after being ordered to repay nearly £9m in overpaid benefits.

In March, Waveney District Council was handed a bill from the Department for Work and Pensions (DWP) after it emerged the government department had calculated the council overpaid £8.9m in subsidies between 2004 and 2007.

Now, after months of round-the-clock work by the council's financial officers to provide the DWP with new evidence, the bill is going to be recalculated.

The DWP's demand for the money had centered on the fact that the council, which distributes benefits on its behalf, had been unable to account for the payments made to residents. However, the council insisted it had not overpaid funds and that the discrepancy arose from a failure to transfer data from paper records to a computer.

The DWP bill, combined with the threat of a further £900,000 bill in future and the need to find £3.4m for urgent repair works to Southwold harbour, meant that Waveney faced a potential £13.2m financial bombshell and a battle to protect frontline services.

The council's chief executive Stephen Baker said that the evidence provided to the DWP will mean that the bill for repayment will be reconsidered.

He said: “The DWP have formally confirmed in writing that the Secretary of State's previous recovery decision will now be considered in light of the evidence we have provided and the wider circumstances of the council.

“This is a hugely important development and while it doesn't bring the matter to an end quite yet, it is a crucial step in the right direction.

“We have worked calmly but tirelessly to accumulate the evidence we believe would reduce the overall claim, and this letter is a clear and unequivocal acknowledgement of these efforts.”

Waveney Labour MP Bob Blizzard, who had called on the DWP to recheck the bill, said: “I spoke to the DWP last week and the department is now looking into the evidence which the council has provided, and they have agreed to recalculate the bill.

“What and how much this will be remains to be seen, but this is important news as the DWP are now prepared to reconsider this £9m figure having looked at this evidence.”


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