OFFICIALS at City of York Council say the recession has left them facing another financial blackhole, as the cash crisis at the authority continues.

The neighbourhood services directorate at the council is heading for a £320,000 overspend this year, with much of the problem due to the global economic turmoil.

Income from commercial waste collections has fallen by £100,000 as many companies have gone bust.

Other unrelated problems have added to the woe though. The Elvington Airfield case cost the council £68,000 in unforeseen legal bills, while security costs at Towthorpe tip have been £75,000 higher than expected, according to the neighbourhood services finance manager Rachel Harrison and performance manager Mike Douglas.

They wrote: “The commercial waste account is forecasting to overspend by £100,000.

This is due to reduced income, which is in part due to price increased, but also a number of national contracts have been lost and a greater number of small businesses are closing during the recession.”

Their report, which will be considered by the authority’s community safety overview and scrutiny committee next Tuesday, comes in the wake of yesterday’s revelations that the council as a whole is on course for a £2.3 million budget blackhole this year.

Guildhall officials say unless the shortfall can be clawed back by the end of the financial year, council tax will rise or the council’s reserves will fall below their minimum threshold.

Meanwhile, the Audit Commission has given the council a rating of “performing adequately” in its management and use of resources.

The Commission carried out an assessment of the way the authority handled its resources for the year up to March 31, 2009 and said there were “elements of strong performance”.

Coun Richard Moore, the council’s executive member for corporate services, said: “York receives a lower government grant per head than most other local authorities, yet we are still able to provide excellent services while maintaining the lowest council tax levels in Yorkshire.”