Councillors have been warned cuts may be needed to plug a £1m "black hole" in next year's budget because savings have not been made.

In February, finance chiefs at Oxford City Council said £1.6m worth of savings would be made in time for the 2006-07 municipal year -- but just months before the annual budget-setting process starts, only £600,000 of efficiency cuts have been achieved.

The Town Hall had hoped to save hundreds of thousands of pounds by closing some civic offices, closing the Oxford Museum at the Town Hall and reorganising its customer service arm, but progress has been slow.

The ruling Labour administration is confident the books will balance, but opposition groups have lined up to take a swipe at the council's financial management.

Liberal Democrat city councillor Stephen Tall, chairman of the finance scrutiny committee, said: "In the most recent budget, set in February, officers recommended to councillors that £1.6m of savings could be made in time for the 2006-07 financial year.

"'Thank you' we said, but experience has taught us to be sceptical, so we asked the council's chief financial officer to report back to us what progress was being made.

"And the answer: 'very little'.

"This year the council underspend is projected to be £315,000 but I predict it will be much more once the final accounts are reconciled. So, a gaping budget aperture of £1m is patched up with a Band Aid and the council is able to struggle on, injured but alive."

The council hopes to generate an extra £350,000 from increases in city centre car parking charges and is anxious to discover how much it will receive from the Government to fund concessionary bus fares for OAPs. It hopes to get £400,000.

Labour council leader Alex Hollingsworth said: "We had a series of proposals put forward where savings could be made -- and all of them came with a health warning.

"The budget is well under control and well managed. The savings will be reductions in expenditure and this will be tied up before February."

The city council has a net annual budget of £25m.

Green councillor Elise Benjamin said: "This is yet another example of poor financial management and I am horrified it's still going on."

Independent Working Class Association leader Stuart Craft said: "If there is a black hole we are very concerned and will make sure the working classes are not affected."

How the council manages its finances is one area the Government closely looks at before rating the authority. The city council is currently ranked as 'weak'.

City council chief executive Caroline Bull said: "All managers at the council are committed to making our services more efficient and cost-effective.

"The savings ideas we put forward for this year were subject to more detailed analysis and, in some cases, we're finding that savings will be less or later than we had hoped. We're continuing to look for savings across all departments."