SHEFFIELD Council could take legal action over £8 million still owed by South Yorkshire’s other three authorities to help cover the cost of the trading standards unit fiasco.
The debt remains outstanding three years after Barnsley, Doncaster and Rotherham Councils agreed to pay up.
Any court action is viewed as a ‘last resort’ but an inspection by the District Auditor of Sheffield Council’s accounts found the lack of payment was a ‘major weakness’.
Sheffield Council has budgeted for receiving the money in its accounts for the current financial year – even though it has not been paid.
And the auditor said Sheffield needs to ensure Barnsley, Doncaster and Rotherham Councils pay up by the end of the current financial year in March to avoid potential cashflow problems.
Sheffield Council is making £50m of cuts to its £480m annual budget in the next financial year and although it has £167m of reserves, all but £10m of them are allocated.
Coun Colin Ross, Lib Dem deputy leader on Sheffield Council, said: “I understand why there was some initial delay while there were some negotiations about what payments each council should make but now it’s three years.
“The authorities need to pay up and council leader, Julie Dore, needs to be robust.”
Debts of £14m were caused by mismanagement of South Yorkshire Trading Standards Unit when it was run by the late Michael Buckley.
Three others who worked with Mr Buckley received suspended jail sentences in February 2010 – after which the four councils, which shared responsibility for the unit, agreed to cover the debts.
Sheffield decided to bear the largest cost of £6m because of it being the biggest of the councils.
Coun Bryan Lodge, Sheffield Council cabinet member for finance, said: “The auditor’s report says we should take all reasonable action including legal action to recover the outstanding money.
“We are working with the three other authorities.”
Barnsley and Rotherham Councils said they are ‘working to resolve the issue’.