A village’s overspending town hall has posted a £33,000 loss.

Port St Mary Commissioners converted a £21,404 surplus in the general revenue fund in 2017 into a £33,148 deficit this year, newly-published audited accounts for the last financial year show.

The local authority has come under fire over a 5.2% increase in its rates and the continuing controversy over the purchase and redevelopment of a run-down property in the village, Manxonia House.

Purchase of Manxonia House in 2016 was funded by the ’discovery’ of £200,000 in a dormant town hall account.

Some £63,000 - £75,000 including legal costs - was spent on refurbishing the property during the year.

The accounts show this was part-funded by £50,000 transferred from another reserves fund - without which the position of the revenue fund would have been even worse.

In July the board agreed to put Manxonia House up for sale and expects to replenish the capital receipts reserve from the proceeds.

Local authorities cannot budget for a deficit.

Asked whether the town hall would get back on track this year, chairman of the Commissioners Michelle Haywood admitted: 'It’s going to be very close.’

She blamed Manxonia House for the parlous state of the board’s finances but predicted that the sale of the building would ease pressure on the authority.

'At the moment our reserves are at critical levels,’ she said.

The Commissioners had been given borrowing approval to purchase Manxonia House but the board in 2016 made the decision to use the funds from the dormant account instead.

That decision resulted in the board not being able to draw down the loan, even in part, to pay for the refurbishment works.

Dr Haywood accepted that the £200,000 released from the dormant account could have been used instead to reduce the rates but questioned whether that would have been a sensible strategy given the other funding pressures faced by local authorities.

The accounts show that the deficit on provision of services - ie the difference between costs and income - has spiralled from £18,565 in 2014 and £51,719 in 2015 to £115,242 in 2016, £176,212 in 2017 and now £192,066 in 2018.

Income from rates during the year was £430,000.

In April, Port St Mary Commissions announced it had reached an agreement over the resignation of the then clerk Alastair Hamilton, who had been on sick leave since the start of January. Acting clerk Hayley Fargher, previously the authority’s finance officer, was appointed full-time clerk in August.