Waveney council stunned by bill for �13m
EMERGENCY measures to try to prevent service cuts and save major projects in Waveney have been ordered after its council was rocked by a financial bombshell, which could leave it having to find an extra �13.
EMERGENCY measures to try to prevent service cuts and save major projects in Waveney have been ordered after its council was rocked by a financial bombshell, which could leave it having to find an extra �13.2m.
Waveney District Council has been left reeling after being told to hand back nearly �9m in government benefit subsidies and learning it will have to pay up to �3.4m to carry out vital repairs to Southwold harbour.
The flagship �52.7m Waveney Campus project, in Lowestoft, is also threatened by the financial crisis, which has sparked calls from the area's MP for the council's political leadership to resign.
Last night, the Conservative-led council revealed it was in discussions with the Department of Work and Pensions (DWP) in a bid to reduce the amount it will have to repay and has been given until May 31 to produce further evidence in its favour.
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It was revealed last year how the council feared the DWP would demand up to �3m in overpaid benefits to be returned, covering the period 2004 to 2007, but this figure has now soared to �8.9m. In addition, the council has admitted it could be forced to return a further �900,000 of benefit subsidies from last year's budget.
In a new development, it is understood the council is being held liable for the huge sums because it has been unable to produce records of benefit payments and other data due to problems transferring paper records to computer.
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Officials are now attempting to piece together evidence to prove that benefit cash, which they distribute on behalf of the DWP, has been paid correctly.
In the meantime the council's finance chief Alan McFarlane has been legally forced to issue a section 114 notice, which prevents him from authorising spending on any new projects until a balanced budget is produced.
Council leader Mark Bee said: 'The correspondence from the DWP could not offer a clearer example of the historic problems this council has faced and the concerted efforts being made to overcome them.
'However, the DWP have taken a firm stance with us and we must work with them to ensure that this stance does not punish those who least deserve it - our communities.'
A report prepared for councillors says that the DWP wants the money repaid at a rate of �2m a year and that a Waveney project team will now be set up in a bid to identify savings across the board.
It also reveals that continued spending on the Waveney Campus - a new council and science headquarters planned for the banks of Lake Lothing - would be in breach of strict guidelines set down within the section 114 notice. Officials will now look at alternative ways of ensuring the Campus is still built.
A raft of savings, including the axing of dozens of jobs through voluntary redundancy or non-replacement, have already been made during the past year after the council revealed it was facing a potential overspend threat to its budget of �5.4m in May.
A recent report by the Audit Commission revealed Waveney was one of the worst councils in the country for the way it handled taxpayers' money, but bosses have been quick to point out that the investigation period ended on March 31 last year and that a new management team is now in place.
The council has also revealed that a new Audit Commission 'direction of travel report', which has assessed its progress up to December 2008, has reported improvements on a wide range of issues.
However, Waveney MP Bob Blizzard said of the possible budget deficit: 'It is jaw-dropping and I think the elected council leadership should resign. It leaves you wondering what the consequences will be for the council tax payers of Waveney.
'The council is saying it is beginning to claw itself out of this hole, but it needs to ask why the hole is so big.'
While Mr Blizzard has criticised the council, he insisted that further discussions about the DWP's cash demands should take place.