TORIES at East Hampshire District Council have been accused of bungling finances which has left them facing a crisis unless measures are taken to deal with an estimated £750,000 funding shortage next year.

In July, councillors were warned that in a bid to find extra cash, the crisis could mean a bigger rise in council tax next year.

It could also mean a hike in car-parking charges, a rethink on concessionary fares and the councilÕs garden collection service, as well as a review of senior management staff.

And last week Liberal Democrats, at a full meeting of the council, refused to support proposals put forward to address the shortfall with all 12 members abstaining from the vote.

They claimed the councilÕs former financial strategy was in tatters and councillors had been kept in the dark.

Leader of the Lib Dems Tony Ludlow accused the Tories of hiding the truth until after the election and he told the meeting the report on the shortfall, which went to cabinet in July, contained some Òshocking predictions and raises the question - how long ago were the councilÕs financial problems known?

ÒThe Conservatives fought an election on the claim that the councilÕs funds were in safe hands and that all in the garden was rosy. About 10 weeks later, we were told that all was not well.

ÒIt takes a few weeks to write a report like this, so the gist of it must have been known to the leader well before then.Ó

Mr Ludlow wanted to know when the information had been available and why he had not been briefed.

He said a £744,000 shortfall figure was a huge amount which represented 6.3 per cent of the total revenue budget.

ÒAnd itÕs worse than that - the 2003 to 2004 shows a worsening from a £889,000 surplus to a shortfall of £116,000. Taken together this comes to a staggering £949,000. The councilÕs former strategy is in tatters.Ó

He admitted that the blame was not entirely with the Tories. ÒWe understand the financial problem forced on the council by centralising governments.

ÒWe had an awful time running the council with a hostile Conservative government in power, forcing us to put up council tax, but you blamed us so why shouldnÕt we blame you.Ó

Mr Ludlow said there was Òplenty of evidence of incompetent management in the council, especially introducing the new arrangements for refuse collection which attracted the auditorÕs criticismÓ.

It was time for the council to turn over a new leaf, claimed Mr Ludlow, and involve all parties in the difficult decision making ahead.

ÒAnd there should be more humility on your benches,Ó he told the Tories. ÒYou had great financial luck in the last four years. Your luck has now run out. We owe it to the people in the district to make the right decision, openly protecting the most vulnerable,Ó

And he warned that Lib Dems would abstain unless Tories guaranteed to listen to their views in the future,

David Clegg said he was concerned that the Community Initiatives Fund would be a victim of the cash crisis.

Officers were being asked to look at making savings on their base budgets, he said. ÒThe argument being that the council is consistently underspent, but underspend goes to the Community Initiatives Fund and we may have cause to worry there.Ó

He warned that there were other items in the secret session of the cabinet this week which could mean the cash shortfall would be even bigger.

Finance portfolio holder David Onslow told the meeting that there were two major reasons that the council was facing the funding shortfall.

ÒThe first is that funds from central government are predicted to be low and the second is that the return on our investments is less than we had hoped. The first is a very important part of our finances, it represents nearly 60 per cent of our funding and we are very cautious in putting figures down at this stage.Ó

But he said the council was examining its finances very carefully. ÒI am sure we will produce a balanced budget for 2004 to 2005.Ó

Council leader Elizabeth Cartwright assured councillors she did not know of the shortfall before the election.

She told the meeting: ÒThese figures represent the worst possible scenarios, it may not be as bad as this, but officers thought it prudent to point out the worst possible case.Ó

She said the aim was to set up a central contingency fund to encourage officers to budget more tightly. But Mrs Cartwright admitted: ÒThere are new contracts going out that may come in at a higher rate than we are paying now.Ó

She said it was right to revue car parking charges as this had not been done for four years and the council was also planning to focus concessionary travel on those who really needed it.

ÒThere are ways in which we can raise the income of this council and reduce our expenditure without necessarily having to resort to putting up council tax above inflation and we will do out best to achieve this."