South Gloucestershire Council could be forced to exhaust all its financial reserves within just two years to balance the budget, finance chiefs warn.
The authority faces a £49million deficit over the next four years.
A report to cabinet said the organisation could balance the books for the 2026/27 financial year from April by using £26million of reserves, but could not exceed that.
It said: “The council has financial reserves available of £25.8m. We can set a balanced budget for the 2026/27 financial year and the 2027/28 gap can be partially off-set by exhausting remaining reserves, but they will run out after two years.
“South Gloucestershire Council is in a stable financial position if the current budget gap is resolved within the next 12 months. Council has usable reserves of £78.3million.
“Of that, £42.5million is set aside for contractual commitments and to address specific statutory needs as set out in the reserves policy.”
The report said the authority’s two other pots of reserves totalled £35.8million and were “the one-off funds which would have to be used to support the Medium Term Financial Plan (MTFP) if no improvement is identified in the financial position”.
It said: “If the council were to do nothing but use reserves to address the budget gap, the available reserves would be exhausted in a further one to
two years.
“The council has a clear understanding of the financial position and has a strong approach to delivery of savings.
“We have included proposals to reduce our spend by £5.2million in 2026/27, rising to £15.7million in 2029/30.
“We are consulting on those changes through our budget consultation which remains open for feedback until December 21.”
The report said the financial shortfall for 2026/27 had increased by £8.5million because of planned savings that had not yet been achieved and now totalled £15.7million.
It said: “Delivery of both existing and newly proposed savings and identification of additional savings are required to ensure the council’s continued financial sustainability.”
South Gloucestershire Council co-leader Cllr Maggie Tyrrell told the meeting: “It’s the annual frustration of not having those final financial figures until so late in the year.
“There is that cost increase in pressure that we have to deal with in demand-led services, and our staff are working extremely hard to contain that spend.”
Council co-leader Cllr Ian Boulton said: “We have tried to be as transparent and open as possible in the budget-setting process.
“I would ask that everyone gets involved in this, that we are all part of the solution of the problem we are facing, and I look forward to working with colleagues across the political spectrum as we tackle this together.”
Newly appointed opposition Conservative group leader Cllr
Liz Brennan said: “The report clearly shows there are some significant financial challenges for the council next year and beyond. The MTFP shows the budget deficit over the next four years of nearly £50million.
“The Conservative group is simply asking that in light of all these challenges that you do all you possibly can to avoid cutting services.”
Cllr Tyrrell replied: “We can assure you that we are looking at every angle that we possibly can.
“We certainly want to work constructively with the government and our opposition colleagues to find solutions because the rise of demand and limited additional funding coming in is a constant problem.”
By Adam Postans, Local Democracy Reporter