Northamptonshire County Council is set to use its general and earmarked reserves in order to achieve a balanced budget this financial year.
And the authority has revealed it will postpone the sale and lease back of its headquarters, One Angel Square, while it seeks further financial and legal advice about how the money from any sale could be used.
Acting council leader Councillor Matthew Golby said: “The current financial climate facing Northamptonshire County Council is exceptionally difficult. Government funding reductions since 2010, the cap on increasing council tax and the increasing cost and demand for social care services mean our financial challenge has never been greater.
“Since 2010 we have worked hard to find savings of £376 million and a further £105 million will be needed between now and 2022. The Section 114 notice spending controls relating to all but safeguarding and statutory services remain in place, but the pressures in adult social care in particular mean delivering a balanced budget is becoming extremely challenging."
Without the reserves shoring up its finances this year, the county council would face an overspend of £16.7 million. As it has £12 million in its general reserves and £4.9 million in its earmarked reserves - money which is set aside for capital projects - its 'rainy-day fund' would be all but depleted.
The reserves would need to be replenished in 2018/19 and so further savings will need to be found during the new financial year.
Councillor Golby said: “This would effectively exhaust our reserves and as such really is a last resort option. It is now the only option available to us. We have communicated directly to government about this as part of our ongoing discussions about our situation.”
Councillor Golby said postponing the sale of One Angel Square was as a result of the Best Value Inspection report and the Secretary of State’s ‘minded-to’ decision this week.
As things stand, it is likely the delay will be for a matter of weeks. It is understood leaders are waiting to see if any intervention funds will be forthcoming from Government before they take what would be an important, long-term decision.
Councillor Golby added: "Following ongoing discussions with our auditors, we are also keen to seek further clarity around the flexible use of capital receipts."
Cabinet will discuss the latest quarterly revenue finance report next month.