NORTH Yorkshire County Council is facing a £5m financial black hole.
It is already axing £69 million from services and faces having to cut a further £23m over the next two years.
Today, (Tuesday, February 5) members of the authority's executive committee recommended a net budget of £374 million for 2013/14.
However, it has still to identify around £5 million in savings to balance the books and the committee was warned it could face further reductions of £9m a year in Government grants from 2015.
John Watson, executive member for finance warned the council could even face legal action if it is unable to meet its legal obligations.
“If we have to reduce our own expenditure by that amount it will be impossible to do whilst maintaining the same burden of responsibility.
"There could be something of an explosion in the offing. The only good news is we are much better prepared than some.”
He said the council had only identified £18 million of the savings needed for next year and with council elections in May, the new council faces difficult decisions to find the outstanding £4.7 million.
Council tax is being frozen for the third year running with a Band D property being charged £1,057.
Coun Carl Les said:”It is a challenging budget, it is incredibly difficult to make some of these choices. But it is the right thing to do to leave money in peoples pockets.”
The authority had hoped to get a last minute boost from the government after rural authorities protested over unfair funding allocation. They had hoped it would mean having to find up to £2 million less in savings, but in the event they only received £374,000.
Other savings include a reduction in cash for concessionary fares and a review of concessionary fares reimbursement to bus operators, reviewing the trading standards service and a reduction in public rights of way maintenance.
The full council meets to decide the budget on February 20.