Shares deal puts council in red

BUT AUTHORITY CONFIDENT DEFICIT WILL BE REVERSED

- WILLIAM TELFORD

PLYMOUTH City Council has seen one of its financial accounts pitched £65m into the red as a result of its controversial shares and pension deal. The authority has had to treat the £72m transaction as a revenue expenditure meaning its reserves now show a huge deficit.

The authority, currently facing two inquiries stemming from the transaction, stressed this is only a temporary measure and is confident the Government will grant it a "capitalisation directive" which will allow it to put the reserves back in surplus.

Opposition Tory councillors said they were concerned about the situation, however, and complained that a pre-meeting was held prior to a recent audit and governance committee meeting, to discuss the financial position in private.