A site due to be sold from the council's property portfolio has become worth £1.2m less than originally anticipated, it has been revealed. The site, which is named in a confidential annex to a report to go before the council's ruling Executive next week, is now said to be worth £2.8m, rather than the £4m budgeted for.

In response to the report, Labour's Corporate Services spokesperson Coun. Julie Gunnell said:

"This is a real concern, and we need to know how this problem arose. Clearly the marketplace is deflating at the moment, and the economic downturn has affected land values but for the site to lose around a third of its value just like that is inexplicable. Officers have been asked how this has come about and to date, we have had no satisfactory answer.

"If the land was overvalued in the first instance then it may be more understandable but relying on an overvalued land sale is extremely poor budgeting".

The ‘Capital Programme - Monitor 1' officer report highlights the possible impact on council services of the council not achieving required incomes on a number of ‘high value, high risk receipts'. And Coun. Gunnell thinks the council needs to undertake a reappraisal of how it values council land assets to ensure their proper values are properly reflected within the budget.

"I will be following this up as I'm concerned about the significant impact this could have on council services. This is not the sort of sum of money to be waved farewell to lightly.

"The council leader is complaining about increasing fuel costs, and it is vitally important he ensures that he is in control of the council's budgets. I call on him to develop a Capital Contingency Budget which would help cushion capital depreciations and the effect this will have on the budget, such as cut backs to services".