“Historic financial decisions” have made drawing up a balanced budget “more challenging”, a council finance boss has said.

Introducing the coming year’s draft budget to cabinet, Windsor and Maidenhead’s lead finance member councillor Lynne Jones warned that the authority’s finances had been precarious this year.

It comes as a Local Government Association survey found that one in five surveyed council leaders and chief executives thought it was very or fairly likely they would have to issue a Section 114 notice this year or next – declaring their authority effectively bankrupt.

Councillor Jones said: “Our officers told us in September that we are at risk of being financially unsustainable. It is within this financial landscape that we have had to produce a balanced draft budget.

“This has been more challenging, due to not having a realistic baseline. The inherited budget set for 2023/24 was proven to be non-realistic and undeliverable almost immediately.”

The council’s delicate financial situation was echoed in the officers’ report ahead of the meeting.

It reads: “The council’s lack of funding, low levels of reserves and high exposure to interest rate fluctuations through its debt funding mean that it lacks financial resilience.

“The levels of forecast overspend and projected budget gap when added together exceeded the amount of reserves held by the council and this shortfall, if not addressed, would mean the council would be forced to declare itself unable to meet its liabilities and file a statutory Section 114 notice."

If the Royal Borough were to issue a Section 114 notice, it would follow neighbouring Slough as well as other authorities including Birmingham and Thurrock.

Councillor Jones added: “Due to historic financial decisions, this council has a much lower level of funding than comparable councils."

The officers’ report listed historic low council tax levels and high inflation and interest rates as among the financial pressures facing the council.

Councillors approved the draft budget for the following year, which is expected to include the maximum 4.99 per cent increase in council tax as previously reported by the Local Democracy Reporting Service.

The draft budget is set to go out to consultation, which closes on January 22. Find out more about the consultation online here.