Officials in Wolverhampton have denied claims that spending on children in care could push council finances into the red.
Town hall bosses have said its financial management is strong enough to overcome a predicted £2.7 million overspend in its general budget.
The authority was responding to concerns that an increasing demand for its looked after children services is overrunning predicted spending.
Wolverhampton looks after 653 children and has allocated £27.9 million to the protection of vulnerable youngsters this year.
The prediction came in a report to the Cabinet Resources Panel this week in which Claire Nye, the council’s Finance Director, warned: “It is currently forecast that the out turn position for 2018-2019 will be an overspend in the region of £2.7 million.”
She added: “The forecast overspend is largely attributable to demand led services, in particular looked after children.
"It is important to note that it is early in the financial year, and all services will be asked to deliver further in year savings in order to address the projected overspend.”
Now council bosses are stressing its budget controls are robust enough to deal with any overspend.
A council spokesman said: “Whilst Wolverhampton has seen a modest increase in the number of looked after children, we are continuing to buck the national trend, as many councils continue to see looked after children numbers increase significantly.
"We are confident that robust procedures are in place to ensure that only those children that need to come into care are brought into care.”
Local authorities across the country have reported that children's services are being put under increasing pressure, with one leading figure saying that some councils could be pushed over the financial edge.
But city council chiefs deny this is the case in Wolverhampton and that they can accommodate an increase within the service without resorting to cash reserves.
A council spokesman said: “The City of Wolverhampton Council has strong financial management and resilience and continues to set a balanced budget without the use of general reserves on an annual basis.
“In 2017-2018 we saw a positive out-turn position across the council, reporting an underspend of £781,000, along with reserves totalling over £60m.
“In relation to 2017-2018, the External Auditor reported that they intend to issue an unqualified ‘value for money’ conclusion, stating the council has proper arrangements to secure economic, efficiency and effectiveness in its use of resources.
“Whilst pressures have been identified during the first quarter of 2018-2019, in particular around Looked After Children, work is ongoing to address this by generating efficiencies throughout the year so we don’t have to draw on general reserves.”
