Council has �14m budget deficit

Mrs Arkley has blamed the deficit on the former mayor

Tough decisions will have to be made to deal with a £14m budget shortfall on North Tyneside, according to the council's elected mayor.

Conservative Linda Arkley claims the capital expenditure deficit could force the authority to raise council taxes.

She said the debt was a result of former Labour mayor John Harrison's failure to sell council land.

But Jim Allen, leader of the council's Labour group, said Mr Harrison was waiting until the land was worth more.

Mrs Arkley said the shortfall had "confirmed her worst fears" about the budget.

John Harrison asked for land sales to be suspended until the economy stabilised

Jim Allen, council Labour group leader

She said: "The council cannot spend money it does not have otherwise we will be taken to the brink of bankruptcy yet again and that is something I am determined will not happen."

If the debt is not reduced, council tax could have to rise by £104 per Band D household by 2013/14, she added.

The deficit in the council's capital expenditure budget could affect future building projects including schools and housing.

Mr Allen, who was the former mayor's deputy, said: "Because of the recession, land prices fell and that caused problems for receiving capital receipts.

"John Harrison asked for land sales to be suspended until the economy stabilised."

He said Mrs Arkley's plans to sell 12 sites were not good value for money in the current economic climate.