LONG delays in dealing with benefit payments has left Worcester City Council “perilously close” to losing £100,000 of Government funding.

The cash-strapped council is also overpaying some people – and may never get that money back.

Finance chiefs have been warned that a failure to clear a backlog in revenue and benefit claims and prevent overpayments could mean the council does not meet Government standards and as a result could lose the £100,000 subsidy.

Targets set by the Department for Work and Pensions (DWP) are based on how long it takes to decide on an application and how much is overpaid – money that may be lost if it was the council’s fault.

Your Worcester News previously reported how the revenues and benefits service shared between Worcester, Wychavon and Malvern Hills district councils has struggled to cope with unprecedented demand in the recession – although bosses say that is now being brought under control.

At a performance management and budget scrutiny committee meeting, head of financial services Grahame Lucas said trying to limit any damage to the bank balance was a “top priority”.

He said: “We are desperately trying to manage that. We still have five months to work on it but it’s a tall order to try and pull it back.”

Labour councillor Marc Bayliss, who is shadow cabinet member for finance, said: “So what you’re saying is any savings on revenues and benefits [achieved by sharing the services between the councils] could be wiped out by our inability to deliver that service?”

The chairman of the committee, Conservative councillor Stephen Hodgson, said: “That is an awful lot of money for our authority to bear.”

But Mr Lucas said: “Without the shared service that £100,000 might be £200,000 or £300,000. Our performance could be a lot worse.”

Speaking after the meeting, Nick Jefferies, who is head of the shared service, said the money was not yet lost and a number of overpayments might also be retrievable if it was the fault of a claimant.

Mr Jefferies also said the department was on course to deliver about £1 million worth of savings across all three councils.

He said: “We are still working within budget despite what the recession has sent our way. We haven’t had to go to any council asking for money.”

• Your Worcester News was the only member of the media to attend this meeting.