HALTON Council has ceased spending on all non-essential items as it battles to avoid a forecast £6million budget gap.

The council has already overspent its budget for the first half of the year by £2.7 million, and if it exceeds its budget by more than £5 million it will not have enough reserves to make up the shortfall.

Announcing the figures to the council's executive board on Thursday, board member for resources Cllr Mike Wharton described the local authority's overspend as "clearly of great concern".

He said: "All of the council's departments are taking action to limit spending to only absolutely essential items, in order to try to mitigate the situation as far as possible.

"However, this is clearly the inevitable consequence of the huge cuts in government funding which Halton has suffered since 2010, at a time when demand for social care services in particular continues to rise."

According to a report prepared ahead of the meeting, the children and families department is currently forecast to be £4.5 million over budget by the end of the year, while adult health and social care could be £2 million in the red.

After the meeting, the council's chief financial officer Ed Dawson described the figures as "scary" and raised the possibility that the council would have "nothing in reserve" at the end of the year.

Mr Dawson told the Local Democracy Reporting Service: "We hold a general reserve, but it's only £5 million at the moment.

"That's the minimum we would want."

The council may be able to use some of its earmarked reserves – money allocated by central government for specific purposes – to make up some of the shortfall, but Mr Dawson said this could only be a temporary solution.

He said: "We just feel as though we are pushing it back a year and back a year.

"Some of the things we will balance next year’s budget with will just be one off savings."

Cllr Wharton agreed, saying: "We need to get it [the overspend] below £5 million. That's why it's so important that we save money now."

However he said that after years of cuts there was little the council could stop doing to save money.

Cllr Wharton said: "They are all essential services to our residents.

"We are in a position now where we can’t stop doing anything, we just have to reduce it."

Halton is not the only local authority in the region to face a significant budget gap this year.

Earlier this week, Wirral Council's cabinet member for finance Janette Williamson said her council was at "breaking point" as it faced a £12million black hole in its budget.

Even if Halton Council manages to get its deficit below £5million this year, it will not be out of trouble.

The council predicts it will have to make another £27 million in cuts over the next three years – around a quarter of its budget – and could have little or no reserves to make up any future shortfall.

That savings figure assumes a 2% rise in council tax for the next three years as well.

Cllr Wharton told the council’s executive on Thursday: "The council continues to find itself in a very challenging financial position and the pressure on the budget will continue to be closely managed.

"Despite the council's record of sound financial management, the financial forecast reveals that there will continue to be significant financial shortfalls over the coming years.

"As always the council will work hard to address these challenges, whilst protecting the most vulnerable in our borough as far as we are able."