A council may be forced to make cuts due to financial pressures created by homelessness and temporary accommodation costs.

Eastbourne Borough Council is at risk of being “unable to set a balanced budget” after spending £4.5 million on temporary accommodation, which it said equates to 49p in every £1 collected in council tax.

It has already made cuts to save money, such as selling some council assets and reducing the events programme.

It said it was forced to agree to two capitalisation directives with the previous government, using capital receipts and borrowing to meet revenue costs with the loan to be repaid over 20 years at an interest rate.

Council leader Stephen Holt said: "The rising costs of living, notably increased rent and mortgage payments have caused a UK crisis that is impacting councils across the country.

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"Over the last 12 months I have repeatedly warned that the increasing costs we are shouldering are wholly unsustainable.

“I took our concerns to Westminster and with a cross-party group of over 50 council leaders, invited ministers and MPs to engage with us.

“While we remain unwavering in our moral and statutory commitment to provide accommodation for those in need, we continue our campaign and appeal to the new government for urgent solutions.

"Regrettably, the colossal financial pressure and a lack of sufficient government support over many years means the council is forced to make significant cuts to services, otherwise the authority will not be able to set a balanced budget.

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"This council has worked incredibly hard to find savings and efficiencies and I want to pay tribute to colleagues and every member of staff who has worked so hard during this time.

“I know the impact these measures will have on our residents and local groups, which saddens me greatly.

"Councils everywhere are struggling to manage factors that are beyond their control and to date there has been little support or interest from central government.

"Along with hundreds of other council leaders I hope the new government is serious about fixing these funding issues, because the future of local government and the crucial public services we deliver are at stake."