OFFICERS at Malvern Hills District Council are keeping a close eye on finances as the credit crunch continues to bite.

The downturn in the economy is already starting to affect the district council’s income and could have a growing impact on its running costs as energy prices rise and winter approaches.

But councillors are determined to manage any future financial pressures by making efficiency savings so that services are not affected.

Council leader Serena Croad said: “I think we will see an impact over the year from the slowdown in the economy but it is not going to stop us delivering services to the people of Malvern.

“The impact on the revenue budget is minimal at the moment but it does need to be watched.”

She said if the situation worsened the council could save money by managing job vacancies and moving staff from Portland House into other council buildings.

“We have got rid of two of our buildings and Portland House is only half occupied,” she said. “There are areas we can look at.”

She said the council had put extra money into its budget for the concessionary fares scheme and not all of this was being used and there was currently a projected underspend of £100,000.

In a report to the council’s executive committee, Andy Baldwin, acting head of finance, told councillors the slowdown in the housing market was likely to reduce the council’s income from planning application and property search fees by more than £100,000 by the end of the financial year.

The price of diesel had increased the cost of running the council’s fleet and rising gas and electricity prices are expected to affect the cost of heating and lighting council premises during the coming autumn and winter.

Coun Croad said there could also be an effect on the council’s income from car parking charges in the district’s towns if people decided not to use their cars or visit the area due to the credit crunch.