COMMUNITY leaders in Monmouthshire are to return to full council a second time to ask for nearly £1million to cover an overspend and avoid "dramatic" service cuts.

And cabinet members were told they must cut their spending to fit their budgets in future.

Community leaders attended a special cabinet meeting yesterday where they were faced with solving the problem of a £1million overspend. As we revealed earlier this week, the deficit exists across three departments, social services, lifelong learning and leisure and environment.

Leader David Waring ruled out the option of dramatic cuts in service to the elderly and schoolchildren and another solution of rolling over the deficit into next year's budget which would impact on council tax.

These were two options of three presented to the cabinet by Steve Greenslade, corporate director for resources.

Instead cabinet agreed to pursue a third option, returning to full council to recommend the use of £927,000 of reserve funding to cover the overspend.

The cabinet made the same recommendation to full council in December 2003 but were sent back to try to solve the problem without using cash reserves.

Mr Waring told cabinet: "As far as we are concerned, we made our decision in December as to how we must deal with this situation."

Independent member Ashley Thomas raised concerns that reserves are dwindling as the fund has been used regularly to support overspending by directorates.

The reserve fund currently stands at close to £3million - the district auditor recently told the authority a healthy reserve fund for Monmouthshire's size should be £5million.

But the Assembly has granted the local authority a £4.9million boost in credit because of a change in rules governing how councils spend their money. The cash is back dated.