Will they even empty the bins? Wolverhampton City Council in new cash crisis

The desperate straits of the council have been laid bare after senior councillors and officers were forced to begin drawing up a further £25 million worth of cuts on top of £98m already planned over the next five years.

Some libraries will open just 15 hours a week while others will see librarians replaced with self-service machines.

Old people's homes, home help and care for people with learning disabilities will now be targeted to go along with 165 individual cuts already drawn up. But details of where the axe will now fall are still to be revealed.

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The controlling Labour group has blamed its dilemma entirely on the coalition government, claiming it has been stripped of £147 million a year – 52 per cent of its funding – compared to 2010/11.

If the party fails to balance its books with a budget in February that sets out £123m of cuts over five years, the government will be expected to send in experts to shut down council spending. The council is about to issue a ban on all expenditure that is not 'absolutely essential' for the rest of this financial year.

Finance spokesman Councillor Andrew Johnson said: "The government has put this council in a position where we could struggle to provide essential services such as caring for the elderly or emptying bins. We are now realistically looking at the prospect of becoming insolvent unless we make very deep and very fast cuts to address this enormous budget deficit which has been forced upon us."

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But opposition Tories and Liberal Democrats in Wolverhampton today rounded on the council for blaming the Coalition. The two parties say they had left the council with £44 million in reserves when their own coalition of councillors was ousted by Labour at the end of 2010.

That is now down to £22m, with Labour saying a lot of the spend was down to settling the 'single status' issue, a legal requirement on all councils to make sure men and women were being paid the same for equivalent work.

Official reports going before the ruling Labour cabinet tonight reveal that, without deep cuts, the cost of redundancy and the spending deficit would reduce the reserves to just £620,000, the equivalent of taking 15 children into care. Labour leader Roger Lawrence insisted: "We are caught in a perfect storm. A lot of the reserves were used for single status."

But Councillor Neville Patten, opposition Conservative leader in Wolverhampton, said: "The council has been spending money willy nilly without thinking about the future. This is a matter of good housekeeping."

And Liberal Democrat and former mayor of Wolverhampton Malcolm Gwinnett said: "The council is in financial meltdown. Nothing seems to be stemming the tide. I have been saying for a long time we need to go back to basics."