South Shropshire District Council was to spend £9.4 million on its Ludlow Eco Park and the Craven Arms Auction Yard regeneration. But budgets increased dramatically and now stand at more than £10.3 million. But South Shropshire District Council said it was not to blame for escalating costs.

The authorirty insisted that council tax payers would not have to foot the bill.

The biggest single increase in expenditure came when a bill for a mini traffic island at Craven Arms rose from around £250,000 to more than £500,000.

South Shropshire District Council is refusing to meet a Highways Agency invoice for £511,000.

Today Councillor Mrs Heather Kidd said: “The overall increases are based on the original budgets from 2002.

“However, clearly there are inflation issues and other changes during the construction process. We are in dispute with the Highways Agency. As far as we are concerned, they were printing money. There is no justification for increasing the cost of a traffic island.”

The figures were made public following the Information Commissioner’s decision to rule against South Shropshire District Council’s decision to keep the costs under wraps.

Council officials are confident that they can negotiate in order to reduce the overspend.

Councillor Mrs Kidd said there was also a dispute with an electricity supplier, whose costs at the Eco Park had increased by £43,000.

She said: “These are essentially superb projects and an investment in our community.”

But Ludlow Tory Martin Taylor-Smith said: “It’s no point blaming the Highways Agency or anybody else.

“South Shropshire District Council was responsible for these schemes and should have known at all time what the costs were going to be.”

A spokeswoman for the Highways Agency said the organisation was investigating the matter.

By Andy Richardson