A financial black hole of more than £2 million has been revealed at Sandwell Council, leading to warnings of redundancies and cuts to services.

The council today revealed it faces a battle to tackle “significant overspends”. The borough’s highways department is £1.2 million in the red.

Another seven of the Council’s departments are also in debt.

The council blames the rise in energy costs for pushing its bills up, leading to budgets not being kept to.

Today opposition councillors warned the cash crisis could bring new cuts in services and the possibility of redundancies among council staff.

Conservative member Councillor Mavis Hughes said: “There have already been five per cent cuts in terms of spend on services across the board. Further cuts will have a massive impact on what people see in terms of front line services such as street cleaning, parks maintenance and community facilities. I also imagine there will be more job losses in the long run.”

Last week the Express & Star revealed that staff within the council’s planning department could go as part of plans to cut back.

The number of applications received by the council is down 16 per cent and staff in the planning department are now expected to be offered voluntary redundancies.

The council has currently over spent £2.128 million since April this year.

A report by Lynda Bateman, executive director of finance and corporate services and Stuart Kellas, head of finance and business services said: “The council may be faced with other budget pressures which may require one-off savings.”

The economic situation is set to be discussed at a cabinet advisory team meeting on Thursday.