Senior officers at Oxford City Council are being re-trained as business managers after a series of funding errors contributed to the authority's current financial crisis.

Councillors have become alarmed at the frequency with which costs for important projects have rocketed - without officers telling them of the increase. Changes are now being implemented to make sure this does not happen again.

The council is facing a deficit of between £2.5m and £4m. It aims to be £2m in credit by April.

To avoid a year-on-year financial crisis, a new system is being introduced with the creation of 23 business units.

They will cover different sections of council business, including city centre management, parks and open spaces, planning, financial management and customer services.

These units are a key part of the council's new business plan, which has been drawn up by chief executive Marion Headicar, acting finance director Peter Argent and a team of consultants.

It is hoped this will prevent council officers from taking decisions on spending without properly consulting councillors.

At Wednesday's finance scrutiny committee, Liberal Democrat Stephen Brown said councillors had not been told that the cost of preparing for a public inquiry into the Westgate Centre development would rise from £40,000 to £120,000.

Council leader Corinna Redman said: "The executive board will be insisting that business unit managers operate within the budgets they have been given and take responsibility for these budgets.

"If they have overspent in one spending area, they will have to compensate with a reduction in another."

Green councillor Dr Mike Woodin said that in the past, accountants had "simply been charting the mounting financial disaster".

Liberal Democrat councillor George Kershaw said: "There have been black holes in the budget where money has disappeared and councillors have not been given any explanation. That has to change."

One of the council's biggest financial headaches has come from the housing benefit department.