SOUTHEND Council has reduced its projected budget deficit by £2.5 million after dipping into its contingency funds – including drawing down £250,000 to cover a drop in parking income.

An £8.1million deficit was forecast by the council in September, however, its latest financial report shows it had reduced the projected deficit to £5.6million as of March 31 next year by drawing down £3million from earmarked reserves.

This includes an additional £250,000 released from reserves to cover “parking income volatility”, with possible reduced income blamed on a delay in implementing controversial seafront 6pm to 9pm parking charges by the former Conservative administration.

Daniel Cowan, Labour leader of the council said: “This report shows where we are halfway through financial year and I am pleased that our forecasted overspend is moving in the right direction – this shows that although we face challenges, these are being tackled and dealt with.

“While many councils are moving to issuing section 114 notices, this is not an immediate risk for this council. Indeed, the stage before that is asking for additional exceptional financial support from the Government and this is not being considered. However, we must remain vigilant and respond positively to the financial risks that the local government sector is experiencing.”

The financial report, which will be reviewed by the policy and resources scrutiny committee on Thursday, shows the pier and foreshore team has a projected £38,000 overspend due to the cost of putting on extra events and a fall in visitors due to poor weather. The council says it continues to feel the pressure of providing social services and has drawn down £1million from adult social care reserves along with £1.625million from children’s social care reserves. This comes after increased demand for special educational needs transport and additional “exceptionally high-cost children’s residential placements”.

James Courteney, leader of the Conservative Group, said: “They are taking one-off money and putting it into the revenue budget which doesn’t solve the problem of the money they’ve overspent. I look forward to asking how the leader thinks that using one-off money to fund his ongoing expenditure works because at some point we will run out of reserves.”