The financial stability of Midlothian Council has been branded at “critical” risk by its own officers.
The local authority does not have enough available cash in its reserves to cover the gap in it budget for the year ahead.
A strategic risk report by its own officers placed financial stability, plans to reduce costs and balancing the budget in the critical category – the highest level.
The risk assessments were carried out to cover the period of October to December last year.
But looking ahead, officers have warned the impact of leaving the European Union without a deal, possible industrial action by teachers and a cut in funding from the Scottish Government have left the council facing difficult decisions.
In the risk report, council officers said: “Councillors and senior management, working closely with communities, will continue to be faced with difficult decisions on where limited resources should be allocated.
“It is therefore important the impact of these decisions on communities are transparent and understood by those deciding on the resource allocation.”
Midlothian has been identified as the fastest growing council area in Scotland with a projected population growth of 26 per cent between 2014 and 2039.
The number of residents who are over the age of 75 is expected to double over the same period.
Last month the council revealed it had a budget shortfall of £9.739 million .
Councillors approved a wide range of cuts to services including increasing car parking charges, axing their taxi card discount scheme and stopping funding for community safety and healthy lifestyle development teams.
They also agreed to review the number of Roman Catholic schools in the county and put council tax up by the maximum allowed 4.79 per cent.
However they stopped short of cutting music tuition and some other services after a loud protest was held by students and families outside the council chambers during the meeting.
The risk report, which was due to go before councillors on Tuesday, as the Advertiser went to press, also highlights opportunities which could come out of the increased population – including jobs from construction of new homes and increasing council tax payers.