COUNCIL finance chiefs say the authority is on course to balance its books this year — despite facing a £3.5m overspend at the moment.
Action is now being taken to bring the authority’s spiralling budget deficit under control.
The credit crunch has bitten deeply into the authority’s cash flow in the first half of the financial year, with reduced income of £172,000 from the council’s cultural and leisure charges and almost a £1m drop in income from the Cowes Floating Bridge and car parking penalty charges notices.
Other causes of concern are the budget deficit at Ryde High School, which currently stands at £1m and will have to be tackled before the school becomes an academy in 2011, according to a report presented to the Isle of Wight Council’s cabinet on Tuesday.
In the report, members were told the recession had impacted on the housing market and had affected the ability of the council to generate income from asset sales.
However, while the situation over the past six months has not improved, it had not got significantly worse.
Key areas under review during the first half of the financial year included the income generated from the floating bridge at Cowes, car parking penalty notices, for which income and fees had been over-estimated, and charges the council makes for use of its leisure and cultural facilities.
The council’s cabinet member for resources, Cllr Peter Bingham, said: "Action is underway to reduce this spend but it will need very strict and regular scrutiny and unnecessary spending must be vetoed."
Turning to the deficit at Ryde High School, Cllr Bingham added: "Concerns do continue at Ryde. There is a great deal of work required by council officers and governors to ensure this is kept to an absolute minimum."
Reporter: davidn@iwcpmail.co.uk