Credit crunch costs council £1.4m

Dec 12 2008 by nick lavigueur, Huddersfield Daily Examiner

THE credit crunch has taken a huge bite of more than £1m from Kirklees Council’s bank balance.

The new hole in the council’s finances has come to light after the council’s parking and planning departments announced big hits from the economic downturn.

The news comes weeks after the council confirmed it had £1m invested in one of the doomed Icelandic banks.

A Kirklees finance spokesman admitted the biggest dent, a £1.2m planning application shortfall, was causing them to review the structure of the department.

He said: “It’s a serious concern. It’s an advance indicator of the impact of the recession.

“It’s down to a major reduction in applications. The small to mid-size houses are still going on but the schemes that involve large developers have dried up.

“I don’t think we will be able to balance (the shortfall) in the short term.

“We’re looking at options to use the (planning) staff and move them into other areas to work.

“But overall the council’s position is OK, as we can offset the costs from other areas of the budget.

“Before interest rates started to plummet we were getting very high returns on our investments and have saved £2m on debts.

“And we’ve made a £2m saving on older people care as some of the responsibilities have been shifted to the NHS.”