Dorset's two new unitary councils have locked horns over their future finances.

Winning the argument could mean the difference of between £600,000 and £900,000 to either authority.

The argument is about where various income and liabilities should be transferred to when the two new councils come into being in April 2019.

Interim finance chief Jason Vaughan told councillors that there was an official, “but gentlemanly”, dispute between the two shadow councils.

He said the difference was about the level of of income and liabilities up for transfer – the Bournemouth, Christchurch and Poole authority claiming a global figure of 6.8 per cent, while the new Dorset Council believe the figure should be around 11 per cent.

“It could mean the difference of between £600,000 and £900,000 a year,” Mr Vaughan told the shadow overview and scrutiny committee.

Arbitrators will attempt to find common ground between the two shadow councils before they come into being in April 2019.

Mr Vaughan said the new council’s budget should be voted on in February – the process of bringing six councils into one being complicated by four corporate finance teams, in four buildings and each with different accounting systems.

He said that current projections estimate the new Dorset Council will start life with a £15.4 million budget shortfall, with a predicted shortfall of £7.9 million in the 2020-21 financial year and £4 million in 2021-22.

The assumptions includes harmonising council tax across all the existing council areas and keeping more of the business rates than at present as well as increasing some fees and charges and maximising income from the sale of capital assets.

He said, in the long run, there could be savings of between £22 and £33 million a year, estimated by a national accountancy firm, although there was also a £18 to £27 million one-off investment to make the changes in the first place.

One of the biggest factors affecting the new council’s medium term budget is the £300 million of Dorset County Council debt the new authority will inherit.