Details of how Bradford Council’s ruling Labour group intends to make a £30 million reduction in next year’s budget have been released, amid warnings that more tough decisions will need to be made in future years.

The funding gap for 2013/14 was initially expected to be about £13.4m, but due to “unexpected reductions” in Government grants and changes to the rules on council tax, plus other pressures, this has more than doubled.

It leaves Labour proposing the first council tax increase in three years – of two per cent – a drop from an earlier estimate of 2.5 per cent. In addition departmental savings of £16.9m are proposed, which is expected to lead to the loss of 136 jobs at the authority, along with cross-cutting savings of £4m.

Further measures to close the gap include plans to abolish council tax discounts on second homes, reduce the exemption period for empty homes and to pass on the full effect of the Government’s £4.5m reduction in support for council tax benefit payments.

Furthermore it is proposed that much of the reduction of £6.7m in the Early Intervention Grant used to fund children’s centres and early years be absorbed by making savings in other services. Pressures on the adult and community services department from demographic changes have resulted in a proposal of additional investment of £1,735,000.

It is also proposed that £9,293,000 of reserves be used to support investment through a £4.1m contribution to accelerate city region economic growth and job creation in the district; £300,000 to support the ongoing empty homes programme; the delivery of ultra-fast broadband and free Wi-fi; and extra resources to tackle stray and illegally-tethered horses.

Councillor David Green, leader of the Council, warned that the authority was facing the most difficult and challenging budget decisions in its history with a real prospect of a funding gap of £50m in the 2014/15 financial year.

He also criticised the last-minute nature of some of the Government announcements, which had left his group working to ever-changing budgetary figures.

“It’s been extremely difficult both in terms of the numbers and the time we were given to complete the budget proposals in,” he said.

“We could perhaps have come up with a different budget if we had the time to develop the strategy. We have had to work on making more fundamental decisions about what the Council wants to do and what it may no longer be able to do.”

Councillor Glen Miller, leader of the Conservative group, said that Labour was portraying “a picture of severe hardship in the funding of essential services”.

“While I recognise that funding is not at the possibly extravagant levels that it once was, when the former Government seemed determined to bankrupt the nation, the Council is still some distance away from delivering only essential services, with what I would call their ‘pet scheme’ expenditure seemingly immune from the financial meltdown which is being portrayed.”

Councillor Jeanette Sunderland, leader of the Liberal Democrat group, said: “There are some difficult decisions to be made. But what I am concerned about is that Labour will continue with pet projects and push costs on to the poorest in society, such as painting and redecorating Council offices, while expecting the poorest to pay more in council tax.”

The opposition has complained it had been difficult to get access to up-to-date financial information to enable the groups to put forward an alternative budget.

The initial budget proposals will be considered by the executive next Tuesday at 10.30am and will be published on the Council’s website for consultation. A final version will be unveiled in February before the budget is set on February 28.