Kingston Council will use a Government grant to freeze its portion of the council tax this year.
But senior councillors at the Liberal Democrat-led authority have warned that the future remains bleak unless the Government increases its support for local councils.
After the council rejected last year’s offer of Government funding for a freeze and raising council tax by 1.99 per cent to 'protect front line services', the authority has this year accepted Whitehall’s offer of help.
Frontline services, libraries and leisure facilities will again be spared cuts this year, the council said.
It said it had found £7.8m worth of savings – mainly through working with other authorities and organisations, under the One Kingston programme.
But Lib Dem councillor Rolson Davies, lead member for finance, said the future was “pretty grim” – unless the Government stopped cutting its support to local authorities.
Further savings of £10.6m will need to be found by 2015/16, increasing to almost £26.4m by 2017/18.
Coun Davies said: “2015/16 onwards is particularly worrying. The options are getting less.
“We’ve got to find £10m next year and this is an enormous sum.
“The future is looking pretty grim from 2015 onwards.
“Going back to 2010, if you looked at all our revenue support – business rates, various grants from the Governement and departments – we were receiving £66m.
“By 2017/18 that will have dropped to £28m.
"That has had to be dealt with at the same time as having to keep up with inflation, more elderly and young people needing support from the authority and an increase in pension contributions."
The council said it had increased spending in these areas:
£1m more in 2014/15 to care for growing numbers of older people and adults with learning disabilities;
• £850,000 over three years to tackle homelessness, including extra costs arising from government changes to benefits;
• £300,000 more for children’s services;
• £277,000 to meet new flood management responsibilities;
• £100,000 to tackle social housing fraud.
Kingston Council leader Liz Green said she expected a small district council to declare itself bankrupt within three years if the Government’s austerity measures continued.
She said: “There are a lot of councils saying they can’t afford to continue to do this. You can’t keep taking money form us and expect us to carry on providing the same services.
"We can’t keep making these savings every time."
Councillor Eric Humphrey, Conservative opposition spokesman for finance and resources, said: "We welcome the fact that this administration has accepted the central government grant to freeze council tax in 2014/15, contrary to the 2013/14 1.99% council tax rise."
Of the £7.8m budget cuts he said: "We believe that there is scope for substantial savings in Council expenditure but there is insufficient detail in these proposals to allow residents to judge the impact they will have on services which affect them."