Reading Borough Council is expecting a £6.4 million gap in funds as pressures on vital services that people rely on mount.
It comes as the council has overspent its 2024-25 budget by millions due to the mounting cost of looking after children and adults, and providing emergency accommodation for homeless people.
The latest in-year budget projections show an additional £5.7 million in the cost of looking after children, which is managed by the arms-length company Brighter Futures for Children (BFfC).
Taking care of adults such as the elderly and disabled has been equally expensive, with a £1.4 million rise on the cost of providing care compared to the budget agreed in February this year.
It is also costing the council £1.2 million to put people in emergency accommodation. There are 174 individuals or families currently in need, compared to 71 in April 2022.
Looking ahead, the council is planning its budget for the 2025/26 financial year.
The budget for councils has become a matter of political debate, with the previous Conservative government being blamed for '14 years of austerity.
While Labour promised during the general election campaign to provide councils with multi-year funding settlements, there are indications that change will not be implemented for 2025-26.
Although Liz Terry, the council leader, is hopeful that multi-year funding settlements to be implemented in the future, she expects difficult decisions need to be made.
Cllr Terry (Labour, Coley) said: “There are positive signs that the new government is listening to local authorities.
“There have been welcome announcements on clamping down on blatant profiteering by private companies at the expense of local councils, particularly those who provide placements for vulnerable children, increasing the number of affordable homes, a fairer funding system which directs limited money to the areas with the highest need, and providing councils with multi-year settlements, which would allow us to plan for more than just one year at a time. The fear, however, is that it won’t be enough.
“The financial resilience of local authorities has been eroded over a number of years, with 14 years of austerity and shortsighted cutbacks to preventative services combining with the high cost-of-living, which means more people now turn to their local council for help.
“It can be easy to talk about these pressures in terms of pounds, but I don’t forget the individuals behind the numbers. It is the job of local councils to support their vulnerable residents. We do not shy away from this responsibility, but the reality is further difficult decisions are on the more immediate horizon before the impact of new government policies can take effect.”
Meanwhile, Rob White, the leader of the opposition, has accused Labour of presiding over more austerity.
Cllr Rob White (Green, Park) said: "It is disappointing that after 14 years of Conservative austerity, a hollowing out of public services and some services being stopped altogether we are looking at more of the same under a Labour government.
"Demand for council services is only going up and the reality is that funding is not keeping up with what is needed.
"Green councillors will keep working for warmer homes to support people through the cold winter months, to tackle Reading's housing crisis and cut the town's pollution which is impacting on us all."
The council's budget measures are due to be debated at a meeting of its policy committee on Wednesday, December 18.
The following day, a public consultation will be launched into the council's budget for 2025/26.
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