A cost-cutting programme designed to make Birmingham City Council more efficient and release money for front line services is running at a £16 million loss.
Although the local authority will save £66 million this year, the cost of doing so is £82 million.
The explanation lies in the up-front cost of investing in new computer equipment to kick-start the business transformation project - bringing together all of the council's IT services into one new unit.
The 10-year plan will deliver annual net savings of £112 million by 2017 but the first three years of the project are likely to result in a loss to the council, a scrutiny committee heard.
Business transformation, led by private sector outsourcing firm Capita, has already proved controversial.
A Voyager IT system installed in October initially proved incapable of dealing with the huge number of invoices received by the council, leaving 30,000 bills unpaid at one stage.
Councillors from all political parties remain unconvinced about the efficiency drive, describing many of the £66 million savings identified this year as thinly-disguised cuts rather than efficiencies.
There was criticism of a lack of detail about how the savings would be made and the impact on services.
Councillor John Alden described a list of 174 efficiency savings as "a bit like the deckchairs on the Titanic."
Coun Alden (Con Harborne) added: "We are just shifting things around to make it look better. It is almost as if someone is trying to put smoke and mirrors up and not let elected members know the true facts.
"The costs are running above savings so far, so are we any better off?"
Opposition Labour councillors may resort to Freedom of Information Act inquiries to get more detail after complaining about a wall of silence from council officers.
Deputy Labour group leader Ian Ward said he was particularly concerned about a £10 million budget reduction planned for older adults services and a £1 million reduction in home to school transport.