Labour's mayoral candidate, Jagtar Singh Dhindsa, calls for Watford mayor Dorothy Thornhill to resign over benefits bill

In an open letter, Councillor Jagtar Singh Dhindsa blamed the overspending on problems in the Watford Borough Council’s revenue and benefits department and also called for the resignation of the Liberal Democrat finance portfolio holder, Mark Watkin.

The mayor hit back saying Councillor Dhindsa was "misinformed" about the benefits gap and that Labour were in no position to attack her stewardship of the borough’s finance when external auditors refused to sign off council accounts when Labour were in charge.

In his letter Councillor Dhindsa said: "The scandal surrounding the amount of overpayment of benefits going on in Watford is only matched by the blasé attitude of Liberal Democrat Councillor Mark Watkin’s defence of it and the deafening silence of Mayor Thornhill on the matter.

"Last year alone, a staggering £1.3 million was overpaid in Housing Benefit, some £386,176 of which the Lib Dem-run council has been forced to admit was incorrectly paid out due to their incompetence and error. "None of this seems to worry the Lib Dems in the slightest. No, instead, it’s all par for the course they say.

"Well that’s not a view that I believe local council tax payers, who end up funding the gap between income and expenditure take."

He also attacked the mayor over her £65,000 salary and Councillor Watkin for holding three council jobs that earned him around £30,000 a year.

Later in the letter he added: "Liberal Democrat Mayor Thornhill and Councillor Watkin should join the Head of Benefits and Revenues and the Manager of the Revenues Department and resign too.

"The Mayor’s missing £1.3 milllion shames her and her party. She should apologise to Watford residents on her way out."

Councillor Dhindsa is standing against Mayor Thornhill, who is seeking re-election to her fourth, term May.

His attack comes a month after a report to the council last month revealed that overpayments had risen in Watford in the last three years from £754,565 in 2010-11 to £1,290,122 in 2012-13. Responding to the criticism, the Liberal Democrats said the overpayments occur when claimants’ circumstances change and there was a time lag before the council is notified of this.

They said once the overpayments were identified the council then recovers them from the recipients.

The administration added that the council's independent external auditors had confirmed that very few of the overpayments in Watford were due to clerical error by council staff.

Mayor Thornhill said: "It's clear that Councillor Dhindsa has learned nothing about council finances since his own disastrous time in power.

"When he was a Labour cabinet member back in 2002, the external auditors refused to sign off the council's accounts for two years running - effectively dismissing them as a work of fiction. And the Audit Commission described the council as one of the worst in the country.

"Sadly it is no surprise that he remains so misinformed."

Councillor Watkin added: "With a 30 per cent increase in workload due to the recession, the benefits service has been under pressure, but there can be no room for complacency. We are working to speed up the time taken to process benefit cases. But I am proud that the council's financial management is demonstrably in better shape than when Labour were in power at the town hall."

"His further attacks on me and Mayor Thornhill merely highlight his own double standards. He holds three jobs, combining full-time work with being a councillor and chair of budget panel.

"He was quite happy to support the mayoral salary in 2002 when he thought there would be a Labour mayor and to support allowances for cabinet members when he was in the cabinet.

"And the Liberal Democrats have frozen allowances every year since 2003 - the last increase was in 2002 when Labour were still in power."