RUTH Coleman, the leader of North Wiltshire District Council, has pledged that local tax payers will not have to face swingeing increases to cover the council's £1.5 million budget deficit.

In November, the council said it expected an overspend of more than £850,000, but that figure has now almost doubled.

Coun Coleman said she expected the district council's share of council tax would go up in line with inflation, but she was confident the council could pay for the deficit with cash from its reserves.

"We always knew there would be an overspend. Now we know how much it is," she said. "Local government finance is not quite like business finance and we always have some late reportage of costs."

She said the original overspend was a result of reorganising the council's management structure and the resulting redundancies of senior staff. The district council received significantly less income through planning application fees as the recent economic downturn had resulted in a falling number of new developments and its investments had not performed as well as expected.

She attributed the increase in the overspend to £1.5 million to a new system of accounting, and the bringing of all accounts together, giving a more accurate and up to date picture of the district council's finances.

But despite her assurances, many councillors were appalled when the new overspend was announced at a meeting of the council's scrutiny committee last Thursday. Coun Toby Sturgis said: "There might not be a tax increase this year, but by raiding the reserves they are unsettling the council's financial stability."

He said he thought the new figure reflected "appallingly bad management" of the council's resources.

He demanded a report into the 2004/05 budget-making process, to reassure the committee that procedural guidelines for planning this year's budget were followed.

He said he wanted to know what actions the executive and the council's business managers were taking to redress the balance.

He said he felt it was important that all members of the council should be informed about the new figure.

Coun John Thomson said: "I think one of the most important problems is if the council doesn't know its position at the end of the year, how can it work out how much it can spend next year? We're not criticising what the council has spent the money on, or what it hasn't spent the money on.

"We just want to know whether the process has been carried out properly.

"What we are saying is the process appears to be faulty because they don't appear to know where they are, and how can they predict the new budget if they don't know where they are?

"I think it comes down to lack of control, which I think is down to inexperienced councillors and some dramatic changes in the accounts department, as well as a shortage of staff."