MALVERN Town Council is facing a spending crisis which could see it going bust by Christmas.

According to Councillor Paul Tuthill, nearly £100,000 is leaving council coffers every month.

He voiced his concerns at last night's council meeting during discussions about the council's annual £5,000 small grants budget.

"This council is spending an astronomical amount and in my calculations, we'll be bust by Christmas. This is the sort of thing we should be discussing rather than fiddling around with these little grants," he said.

Acting town clerk Rosemary Lansdowne said the council had sufficient funds to last until Christmas when the next part of its council tax precept was due.

The council currently has £40,000 in the bank, £107,000 in a deposit account and is awaiting £144,000 in VAT rebates. The precept due in January will boost its funds by £400,000.

"This is a crisis. It's important and something needs to come back quickly from the budget working party about what we're going to do. There's no guarantee of the VAT claim coming to us in time," added Coun Tuthill.

Other councillors agreed the town council could face difficulties, but were happy to leave it in the hands of the budget working party which is currently drawing up an extensive financial review with the aim of streamlining the council's income and spending over the next four years.

Coun Ralph Madden said: "It's a very close-run thing at the moment and if the second VAT claim doesn't come in then we do face some issues in December.

"The council's current spending rate seems to be averaging about £80,000 a month and we have some big commitments coming up. The Christmas lights are going to cost £15,000."

Coun David Houghton-Smith added: "The amount of money we as a council spend each month is horrendous and we have got to get it in check."

The budget working party is expected to report back with detailed figures at the next council meeting on Thursday, October 25.