Bradford Council's top finance officer has advised the authority's ruling executive not to rush out and spend the £3.1 million it saved last year, by warning them: "You may need it".

Steve Morris, the Council's finance director, told members there are money risks ahead for the Council and the underspend should be set aside.

City Hall accountants estimate the authority still needs to save £5.6 million next year, £5.2 million the year after and £1.6 million between 2008-09.

Among the biggest cash risks within the next 12 months is the possible harmonisation of pay and conditions of desk and manual workers which could have "substantial costs".

Looking further ahead, between 2006-09 other risks include rising landfill costs and the increased funding needed for Education Bradford.

Mr Morris told members that last year's savings were good: "This means the Council has some financial capacity in reserve - and you may need it."

Councillor Kris Hopkins, the Council's executive member for corporate matters, praised officers for their "good financial management", and added: "To have a surplus from an underspend at the end of the year is a luxury to some extent but, when faced with enormous risks, we should not be complacent. As we go into what will be a very difficult budget process - the Government settlement, which could be very difficult for the district - we have to carry on with the work that has already been done and steel ourselves for the next few months."

The chairman of the regeneration and economy committee, Councillor Val Slater (Lab, Royds), asked members of the executive to disregard parts of an auditors' report into the way the collapse of the private company which ran Bradford Festival was handled.

She said that the report's authors had been wrong to criticise the committee and its then-chairman for, among other things, allowing the company which had once run the festival to scrutinise the new company's performance.

But the Council's executive member for culture, Councillor Simon Cooke, rejected the approach, saying: "I think the criticisms here have to be taken on by the Council and by chairs of scrutiny."