FINANCE bosses claim there is a “black hole” in the Tendring Council’s finances.

Peter Halliday, Tendring Council's cabinet member for finance, gave a bleak assessment of the council’s bank balance – but promised there will be no cuts in services or staff.

Mr Halliday, who is part of the authority’s new Tory administration, said there is a £561,000 funding gap which must be found from this year’s budget.

He said: “There is a black hole in the budget.

“We need to find that from somewhere and it has got to be found from this year’s budget.

“There is a big economic storm coming and if we use our reserves to plug that hole now there will be nothing left to plug an ever larger hole in the coming years. It is important we balance the budget every year.”

It is predicted the council will get less money from the Government next year, and by 2011 there could be a deficit of nearly £2million.

Mr Halliday said the previous Tendring First-led administration used underspends to balance the books, which he said was bad housekeeping.

But David Lines, former leader of the council, said the council's finances were in a healthy position and was rated as “good” by the Audit Commission last year.

He added: “Today we have a £1million surplus – enough to cover next year’s £561,000 shortfall – and reserves of nearly £4million.”