Consultants and temporary staff will continue to be employed by Oxford City Council "as and when" - despite the bill last year topping £3.5m.

The authority, which is currently plotting ways to fill a £5.2m black hole in next year's budget, spent almost £1.5m on consultants and £2.1m on temporary staff in the 2006/07 financial year.

The news comes at a time when a cost-cutting exercise at the Town Hall means as many as 70 jobs could be lost in an efficiency shake-up - although the council claims it is saving money by taking on temporary staff.

Figures obtained by the Oxford Mail show the city council's finance department spent the most on consultants - almost £600,000.

But chief executive Peter Sloman made no apologies for bringing in outside help and said he would continue to sanction spending on consultants when required.

He said: "The council buys in specialist knowledge when it helps us either save money or make money.

"For example, this figure includes treasury advisors who help make sure we get a high receipt on our cash holdings.

"This is a very specialised area of knowledge which is constantly changing and in a small organisation like ours it would be a waste of money to have in-house staff.

"It also includes the cost of our internal auditors.

"The new arrangement of having consultants saves us £100,000 a year in comparison with employing auditors full time.

"Our spend for last year for consultants and temporary staff put together is less than two and a half per cent of our overall expenditure.

"My aim is to reduce the cost for temporary staff and consultants overall, but we will buy in specialist knowledge and advice as and when it is needed.

"I am personally highly committed to ensuring Oxford's taxpayers get value for money and want to ensure consultants are only employed where they add value and help us meet our aims of improved efficiency."

Labour group leader Bob Price said: "Costs have been out of control for the past 18 months and part of that has been a failure to control the costs of consultants and temporary workers.

"Overspending on consultants is not a blow, it's a smack in the face."

Liberal Democrat deputy leader David Rundle added: "We have to recognise it is not the case that all consultants are bad. "There are many who help us save money and others who help us make money."