EFFICIENCY savings of £4.3 million will need to be made over the next financial year if Solihull Council is to balance its books.
And council taxpayers can expect a council tax rise of around 4.73 per cent - less than the current rate of inflation.
Councillors were informed of the gloomy financial forecast by the council's acting director of finance, Sam Gilbert, at a meeting of the full council on Tuesday.
Councillor Ken Hawkins, cabinet member for resources, said the figures did not come as a surprise, forming part of a three-year budget strategy which began last year.
He said: "One of the things about a three-year budget is we knew it was coming so we can plan for it."
An upbeat Coun Hawkins pledged the savings of five per cent would not impact upon services if at all possible but said it would be challenging.
"It is not a bad thing to make efficiency savings - every local authority should be as efficient with its resources as possible."
"But it is extremely difficult for a local authority like Solihull, which is one of the leanest - if not the leanest - local authority in the country," he said.
With Solihull still the poorest funded metropolitan council Coun Hawkins added that again the council would endeavour to get a better deal from government.
"It is unfair on Solihull. We are an extremely efficient council and we feel we shouldn't have to make this amount of savings but we will do it and in a way in which frontline services will not be affected."
Savings will be made more difficult by the rising cost of utility bills, though Coun Hawkins said the uncertainty over £3m in an Icelandic bank would not impact upon next year's budget. It doesn't play a part in the budget for next year but the sooner we have it back the better - so we can plan for the year after."