OXFORD City Council has been accused of building a budget ‘war chest’ ahead of next year’s local elections.

The Labour administration will review its spending in the autumn to ensure its unprecedented £9m cuts package is on track.

But opponents have accused the council of “holding back cash” and have urged it to loosen the purse strings to ease residents’ pain.

The Green Party believes the council is cutting back now in order to go on a pre-election spending spree in 2012 to woo voters.

In February, the council agreed a raft of cuts and increased charges as it sought to slash £9m over four years.

But since then it has landed Government cash – including up to a £1m grant to pay for housing benefit administration costs – that it had not budgeted for.

Green councillor Elise Benjamin said: “We know there is certain money that is in the offing from Government and the council has several million pounds more in reserves than it needs.

“We’re certainly arguing that a small amount of these reserves can be used to save jobs and services.”

The council’s general fund working balance, referred to as reserves, stands at £5.2 million.

The city will go to the polls next May to elect 24 of its 48 councillors and Ms Benjamin said Labour’s budget planning had been politically motivated.

“We suspect part of the reason money has been held back is because there is an election next year. Far better for them to go on a spending spree before that,” she added.

Charges for many council services have increased above the rate of inflation, including a new £35 charge for garden waste and higher fees for pest control services.

About 110 council posts are set to go as part of the savings.

The Labour group said it had to take the drastic steps to deal with a cut to its grant from national Government.

Council deputy leader Ed Turner dismissed the idea the council was sitting on cash as a “smoke screen”.

He said: “It’s complete rubbish. We’re having a quarter of our Government grant removed over two years. It is an unprecedented attack on the public sector by Government.”

He said it was good practice to keep budgets under review when making significant savings and added: “There are a number of big questions and uncertainties in our budge. For example, there’s a huge question over Government finance.”

He said the council had got some Government money it had not banked on getting, like the housing benefit administration grant, but there was still a doubt over that money beyond next year.

Any extra money in balances would be used to reduce council borrowing, he said.

Mr Turner added: “There is a lot of uncertainty and we don’t want to get carried away with good news or bad news.”