TWO companies forced to move off the Arcade site are claiming a total of £550,000 in compensation in a move which could leave a black hole in the council's finances.
Businesses were relocated following the council's seizure of the site, on the corner of Hoe Street and High Street in 2002, and as is usually the case, many have submitted compensation claims, which have been budgeted for.
The latest claims were made after the deadline for this year's compensation budget passed.
The authority is disputing the claims and believes the eventual figure it will have to pay out will be lower than £550,000.
But it has admitted that it does not know how the cost of the claims will be met and a council cabinet monitoring report describes it as a “significant budget risk”.
This raises the prospect of taxpayers' money being diverted from other areas to plug the gap in the finances.
A council spokesman said: “At this stage we are unable to comment on how much may be allocated to the companies in question, as to do so could be prejudicial to the claims process.”
“There is an update on the capital programme going to cabinet in November.
“This will address the funding for compensation though, of course, we will not know the full amount needed until the claims themselves are fully settled.”
The council has not revealed the details of the claim or the names of the businesses involved.
But claims for compensation typically cover loss of income, relocation costs, fees or property interest.
Cllr Matt Davis, Conservative group leader, said he was surprised that compensation claims were still being submitted by firms forced off the site.
He said: "This is something the council tax payers should be worried about.
"With all the various budgetary pressures at work it is hard to see how an amount of money of that size could easily be found."
Firms have six years before they lose the right to take a compensation claim to the Lands Tribunal.
A desire to meet this deadline could explain the timing of the claims.
The reference to the budget risk was spotted by Guardian reader Kevin Lord, of Greenleaf Road, Walthamstow.
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