TEST Valley Borough Council will need to make £1million of savings by 2020, a new report has suggested.

The authority’s budget update, which was discussed by cabinet last week, has pointed the finger at “severe” cuts to government grants as the reason behind the expected deficit.

Reports forecast that it will need to make savings of more than £500,000 in the 2018/19 financial year to balance its books.

The council expects this deficit will rise to a total of £1million by 2019/20.

However TVBC has already made a number of staffing cuts, which it says will contribute towards closing the budget gap.

The authority made its customer relationship manager post redundant last month, which they expect will save more than £60,000 a year.

The authority’s client services manager post was made redundant in May 2016, while the council says it has made £47,000 a year of savings due to changes in its Customer Services Unit.

TVBC also saved nearly £40,000 by not filling its vacant senior business support officer post.

According to the authority, one of the major factors is the loss of the Revenue Support Grant (RSG), which the government plans to phase out by 2020.

The council was awarded an RSG grant of over £3million in 2013/14, but since then this had steadily reduced by around £500,000 per year.

It is also expecting to lose more than a £1million from the Settlement Funding Assessment (SFA) grant by 2020.

Council chiefs plan to cover most of the loss in grant funding through the awards from the New Homes Bonus (NHB) scheme.

The government scheme is aimed at encouraging local authorities to grant planning permissions for the building of new homes in return for additional revenue.

Test Valley Borough Council is expected to rake in nearly £5million from the scheme in 2017/18, due to the recent spurt in housing developments in the area.

As well as medium-term pressures, the council has also been forced to plug a £178,000 gap from its November budget report.

The council says it has achieved this through a mixture of savings, extra council tax income and money made from recent property investments.