OXFORD City manager Mark Jones has started making changes to his squad after being handed a reduced budget for next season.

Skipper Lee Henderson and Godfrey Poku are among those who have been released, but new offers have been offered to the likes of top-scorer Matt Paterson.

And Josh Ashby, told by Oxford United this month he was surplus to requirements at the Kassam Stadium, is among those in discussions to join City next season.

Jones is having to work with less this summer as the club continue to pay down a debt which stood at £1.5million two years ago.

Excellent progress has been made – helped by City’s record run to the Emirates FA Cup second round – but continues to divert resources away from the first team.

Jones, who also kept the club in Vanarama National League South, said: “Overall I think we can be satisfied with last season.

“It’s actually quite a success that we’ve had no major incidents financially, that the club are still competing at this level.

“I don’t think some people quite realise what a precarious position the club is still in.

“(Directors) Paul (Lyon) and Justin (Merritt) have done exceptionally well to manage the situation.

“The debt is coming down and we are chipping away at it.”

He added: “We are going to be working off a slightly smaller budget next year.

“I totally understand the reasons why, but it does make my job a bit challenging.

“Although we have had a bit of a budget cut that doesn’t automatically mean we are going to struggle.

“I’m confident we can be competitive.”

It means tough decisions have to be made, none more difficult than releasing Henderson.

Jones said: “When I got the job one of my first decisions was to make him captain, but he has been plagued by injuries unfortunately.

“We can’t be offering contracts to players where we’re not sure about their fitness.”

Striker Justin Bennett also falls into that category and the popular Godfrey Poku has also been released, with Jones concerned about the midfielder’s commute from south-east London.

Mo Fofana is moving on and Freddie Grant has turned down a new deal in the hope of going on trial else- where.

Meanwhile, Ashby, who has spent time at Court Place Farm on loan, is close to signing a permanent deal.

Jones said: “Josh has agreed in principle, the talks have gone really positively and everything looks good.

“He’s just checking one or two things, but we are very hopeful we can complete his signing very soon.”