Halton Council may have to cut another £22 million of spending over the next three years as it continues to fight a yawning black hole in its budget.

The expected cuts represent a fifth of the council’s current budget and most will have to come next year as the impact of the pandemic on council tax and business rates income begins to be felt.

Cllr Mike Wharton, Halton’s finance chief, told the council’s executive board on Thursday: “The council continues to find itself in a very challenging financial position which has been made worse by Covid-19.”

This year alone, the council is facing a budget deficit of £4.8 million due to both the impact of the pandemic and increased spending on social care and children’s services.

Although this figure is less than the £7 million deficit forecast at the end of June, it is still more than the council currently has in its general reserves.

Cllr Wharton said: “The council’s general reserve is currently £4 million, so unless the overspend is reduced and the government fully funds the costs of Covid-19, the general reserve will be consumed by the year’s end.”

In that situation, money kept in reserve for specific purposes will have to be reallocated to make up the difference.

Cllr Wharton added that spending would continue to be restricted to “only what is absolutely essential”, as it has been for more than a year.

Around half of the forecast deficit is due to the costs of dealing with the pandemic, which the council expects to reach £17.2 million by the end of March 2021.

In contrast, Halton expects to receive only £15 million in support from the government leaving a £2.2 million shortfall. On top of this, reductions in next year’s council tax and business rate income related to the pandemic are expected to reach £8 million, for which the council is yet to receive any support.

Cllr Wharton said the council would continue to lobby the government for more support “as hard as possible”.