OPPOSITION councillors have demanded better spending controls at the city council following revelations Guildhall bosses accidentally underspent on services by nearly £700,000 last year.

Labour members expressed concern that front-line services were dramatically cut back last autumn as finance chiefs predicted the council was running out of cash – only for end-of-year figures to show they actually underspent the city’s £16 million budget by £693,000.

Guildhall head of finance Grahame Lucas admitted his department did not realise the scale of the underspend until almost the end of the year. He said: “Up until month 11 we were forecasting a £200,000-£300,000 underspend.”

Labour finance spokesman Coun Marc Bayliss said the end-of-year figures had come as “too much of a surprise”, pointing out the leaders had “started off forecasting doom and destruction”.

The previous year the Tory council overspent its budget by more than £200,000, and Liberal Democrat Councillor Liz Smith said better monitoring was needed to prevent the city continually going over or under-budget.

She said: “This year we have this underspend. The year before it was something else.

“And it will be something else next year. Given the seriousness of the situation that’s facing us, I think not having adequate monitoring is very serious.”

Mr Lucas insisted Guildhall managers were right to be cautious last year, but said tighter spending controls would now be implemented.

He said: “We did overspend (the previous) year, and we couldn’t do that again. Managers were extremely wary of committing the council to expenditure, and as a result we’ve come up with these results.”

Mr Lucas suggested one problem had been middle managers keeping secret pockets of cash tucked away for emergencies.

He said: “We’ve realised we need to be more robust in... dealing with managers, to make sure we don’t have these hidden pots being held onto unbeknown to us.”

About £200,000 of the unspent cash will now be ploughed back into services, with the rest topping up the council’s depleted reserves.

Labour deputy leader Coun Paul Denham said some of the money should be spent bringing back free bus travel for pensioners at peak times.

He said: “It’s a bit difficult to justify how that £50,000 had to be saved when we’ve managed to underspend by £700,000.”

But Tory deputy leader Roger Knight said bus travel funding could not be restored as it was a “recurring cost” – meaning the city would have to find the £50,000 every year, not just this one.

And he defended managers who underspent their budgets, saying: “It’s great news. We needed to restore our reserves. We couldn’t carry on the way we were going.”