Cllr David Sparks has rubbished claims by an independent auditor who has said their current spending pattern will lead to them going bankrupt by 2017.

At last night's cabinet meeting, auditors from Grant Thornton told the room that, unless action is taken now, the authority will run out of funds early next year.

Just last week, cabinet members announced they had managed to reduce the predicted £50.6million shortfall to just under £21million by 2018/19 by leaving "no stone unturned" but that still leaves the authority in the red if no further savings are found.

Mr Cook, representing the auditors, told council bosses that: "At the moment the council has still got reserves which it has set aside for a rainy day but if you're running at a deficit, you're spending those reserves.

"If you carried on spending at that level then at the end of 2016/17 - the council would have no money left. The council would run out of money - you wouldn't have any reserves...unless action is taken now.

"The situation for Dudley Council could get very serious. The purpose of writing this report now is to highlight that's very much a direction the council does not want to go in. Once you get into that position you have to make some very difficult decisions, even more difficult than perhaps are on the agenda today."

He said the council still has to set a budget for next year and he warned: "I would strongly urge you not to set an unlawful budget - and that the expenditure is matched with the finance you've got available."

According to the latest figures, presented to cabinet, council chiefs are facing a £221million spend on services in 2017/18 with only £211million forecast to be left in the kitty.

However, Councillor David Sparks, cabinet member for finance and former leader of the authority said as long as he is on the council members will never set an illegal budget and he refuted concerns the council is heading into a crisis.

He said: "There's absolutely no question of this council not producing a lawful budget whilst I'm around and whilst I've got the finance brief.

"You can talk yourself into a crisis but you should not do that when you're talking about an organisation that employs thousands of people. The last thing I want is for people to think we're in a crisis and we're not.
      
"We will continue to run Dudley responsibly. We will not talk ourselves into a crisis."

The council has proposed savings of £8million for 2016/17, moving up to £18million by 2017/18 and £20million by 2018/19 - in its latest budget report.