YORK’S political leaders are heading for a £4.3 million black hole in their budget, as they struggle to hit savings targets.

City of York Council has to save £21 million in 2011/12 as Government funding reductions continue to bite, but a new analysis which will go before its ruling cabinet next week has shown it is under severe pressure to meet those targets.

A quarterly report by financial officials Debbie Mitchell and Andrew Crookham says the council is in danger of exceeding its £123.9 million budget by £4.29 million.

An increase in the number of children and young people in the council’s care, rising demand for residential and nursing care and delays in making savings already earmarked are all major factors.

Although the projected overspend is similar to that at this stage in recent years, Ms Mitchell and Mr Crookham said the 2011/12 targets would be “considerably tougher” because of the savings demanded when its overall budget was agreed earlier this year.

Ian Floyd, the council’s director of customer and business support services, said last night: “The last budget was one of the toughest in the council’s history, but we are committed to working within the budget parameters.

“We will be working with service providers to ensure we can continue to provide high-quality, value for money services on budget. The council’s finance teams will be working with service managers to ensure savings are made within directorates to mitigate forecast overspends in other areas.”

Coun Paul Healey, deputy leader of the Conservative opposition, said the financial projections at this time of year were often grim, but he also called on the ruling Labour group to up its game.

He said: “The Labour party cannot blame this on central Government or the Liberal Democrats, as has been their tactic for many years.

“They took the opportunity in their budget to spend instead of save. Perhaps now they will start to run the council, rather than acting like an opposition in power.”

The report to the cabinet shows that the communities and neighbourhoods directorate is facing a £1.85 million overspend, mainly through delays to cost-cutting measures such as a review of its transport fleet and agency staff costs.

In the adults, children and education section, the projected overspend runs to £1.7 million, with soaring care costs being blamed along with hold-ups in outsourcing a contract for reablement care and making changes to how elderly people’s homes are run. The council is now trying to work out whether savings planned for 2012/13 can be brought forward.

Delays in service reviews have also led to a potential £771,000 overspill in the city strategy directorate, although the construction downturn in the recession has meant less income through planning applications. The council is cracking down on filling vacancies and other expenditure to try and turn the situation around.

Lib Dem leader Carol Runciman said their administration had left a “legacy of a surplus from an underspend on last year's budget”, when it left office in May.

She said: “Although these are only the first quarter's figures, the projected outturn shows the need for each cabinet member to pay close attention to spending during the coming year. There should be no call on the council’s reserves which are now just above the statutory minimum.”

Labour council leader James Alexander said the pressures stemmed from measures agreed by the Conservatives and Lib Dems in February, and said those had led to a number of financial black holes.

He said Labour had amended the budget to save vital services, He added: “Such unprecedented savings as a whole would not be necessary if it was not for the speed and depth of cuts to local councils by the Conservative Liberal Democrat Government, the effect of which in York has been exacerbated by years of local Liberal Democrat waste.”

He said such deficits had been overcome in previous years.