THE recession has cost Wychavon District Council at least half a million pounds, it has been revealed.

Deputy managing director Vic Allison said the economic downturn meant the council was counting the cost of reduced incomes on planning fees, land charges, car parking and its investments.

Mr Allison said the council would have to have a year of consolidation and wait for the economy to recover.

This is all set against the backdrop in which the council is required to save £1 million over the next three years.

Councillor Bob Banks, executive board member for resources, said the council’s financial situation was changing rapidly as a consequence of the economic downturn.

“We are more resilient than most given our past good financial management,” he said.

At £13,512,300 the 2008/09 revised net expenditure budget for the council is £549,800 more than the original budget for the year.

The 2009/10 net expenditure base budget for the council is £13,308,800, which is £346,300 more than the original budget for 2008/09 and £496,800 more than projections for 2009/10.

Mr Allison said that figure could change, though, depending on what happens to the economy in the coming weeks and months.

A deficit budget for 2009/10 is projected requiring the use of £662,000 of reserves, but it is still hoped the £1.5 million invested in struggling Landsbanki will be recovered.

While there has been no suggestion of job losses councillors have been asked for ways in which they think savings big and small can be made.

Mr Allison said the council would look to tap into more funding from the Government wherever possible, and Councillor Clive Holt said the council should look at making cuts to non-statutory services.

Councillor Margaret Rowley said that when the council sets out its strategy in the future it should look at what it can do to help stimulate and support the local economy.

Meanwhile, the executive board agreed to allow the council to lend up to £5 million to the Nationwide Building Society for a maximum duration of five years.

Mr Allison said that while the rate is not as attractive as what could have been achieved with banks he said he thought it was important the council invested where money is safest at this moment in time.