27 June 2012 Last updated at 01:03 ET

Bournemouth council's predicted saving figure cut by £43m

Former councillor Adrian Fudge has accused Bournemouth council of "playing with public money"

Bournemouth council has reduced its £120m saving prediction by a third, less than a year after implementing their transformation programme.

The council forecast a £119.562m saving over five years but has now reduced the figure by £42.779m, to £76.783m.

Adrian Fudge, a Lib Dem and former deputy council leader, accused the council of "playing with public money".

The council said it is standard practice to refresh budgets annually when new information becomes available.

Mr Fudge, who is concerned the council could make further saving downgrades, said: "There is no information into what constitutes a £43m reduction and so we don't know if we are getting value for money."

As part of the transformation, outsourcing firm Mouchel took over six of the Conservative-led authorities departments, which the council say will save about £1.1m per annum, over the 10-year period of the contract.

In April 2011, Mouchel rejected bids of 151p a share from the Costain Group but its share price now stands at about 3p.

Chief accountant suspended

Mr Fudge said: "Mouchel is bumping along the bottom so it would seem the council has taken one hell of a gamble and I'll be making a complaint about the revised figures."

A council risk assessment on Mouchel, available on the authority's website, states "Mouchel Group plc is solvent, until at least 28 November 2012, despite the Mouchel Group balance sheet showing an insolvent position".

CHANGED TARGETS

Original and revised saving targets

• 2012-13 £1.088m (now £1.954m)
• 2013-14 £9.460m (now £5.965m)
• 2014-15 £28.128m (now £15.954m)
• 2015-16 £39.678m (now £25.955m)
• 2016-17 £41.208m (now £26.955m)
• Total: £119.562m (now £76.783m)
• Source: Bournemouth Council budget

It says this is because its auditors, PWC, have prepared the year end accounts on the basis that Mouchel Group is a "going concern".

In a statement, the council said: "The prospect of further reductions in local government funding in addition to the cuts already made by government makes it crucial for the council to plan for significant budget reductions in future years.

"All of these arrangements and their financial implications were set out transparently and discussed in public by cabinet through our normal decision-making processes."

The council said it has to continually update and refresh its financial plans and strategy as business and service requirements change over time, reflecting increases in service demands, government policy changes, changes in funding and local initiatives.

Last year, the council's then chief accountant Stephen Parker was suspended for four months on full pay after he emailed councillors his doubts over the value of the authority's deal with Mouchel.

Mr Parker, who has since left the council, also questioned whether the deal allowed the council to impose financial penalties for breach of contract, should Mouchel fail to deliver.

The council could withdraw from the contract but would have to prove Mouchel was under-performing, Mr Fudge said.

Mouchel has not responded to requests for a comment.