City of York Council is in a “very serious” financial position as it faces having to find £6.7 million to balance the books over the coming year.

Huge pressure on the adult and children’s social budget, worsened by the impact of rising inflation, means savings will need to be found and residents may feel the hit, the council’s executive committee heard.

Chief financial officer Debbie Mitchell told councillors – in the “absolute worst case scenario” – that almost all of the council’s £6.9 million in general reserves could be wiped out by the projected overspend.

Providing an update on the first finance and performance report of the year, she said: “We’ll be looking at where we can make efficiencies or other savings, or restrict non-essential expenditure to try to recover the position.

“But this is clearly a very serious situation for us, and we’ll need a significant amount of work from all officers across the council to try to manage the position.”

Labour group leader Cllr Claire Douglas said the financial outlook was “very concerning and very sobering”.

She asked council leader Cllr Keith Aspden how he planned to deal with the problem.

He said it was early in the financial year and that improvements on the position were often made throughout the year, adding that more support was needed from central government.

“For about a decade now we’ve been in this position, unfortunately, that we need more sustainable national funding, but in the absence of that, we’ll do everything we can do to maintain those services that residents expect,” he added.

Cllr Carol Runciman said problems in adult and children’s social care were “not being addressed properly at national level”.

Ms Mitchell said the council had a good track record in its financial performance and there was “opportunity for us to take action to turn this around”.

But she added: “That’s a lot of work to do and we can’t at this stage guarantee that that won’t impact on service delivery, or on delivering the council plan and that people won’t feel the impact of that.

“I would hope that we could restrict those kinds of things to perhaps things that residents might not see the impact on, but clearly, of that value, that will be very difficult.”

Problems remain in the council’s building services department, with the average number of days taken to re-let empty council properties up to almost 95, up from 74 in 2021/22.

Cllr Douglas said: “We mustn’t forget that with the health inequalities in our city – one of the biggest factors that impacts that is the quality of housing. We know that there are serious problems with it.

“I see this on a weekly basis. It’s quite horrifying.”

Executive member for housing Cllr Denise Craghill said: “Our building services team continues to experience numerous challenges, including increased competition for skilled tradespeople and the shortage of building materials coming on top of a post-Covid battle.”

The council was “beginning to turn this round”, she added.