A no-deal Brexit is one reason Greenwich may have to dip into its savings in coming years, councillors have been warned.

Greenwich Council has been listed as one of a dozen councils that is “in danger” of exhausting its reserves if current spending habits continue.

Greenwich’s reserves dropped 44 per cent between 2015 and 2018, however the authority’s reserves are strong compared to other councils.

Cash reserves – money held back for projects or emergencies, such as flooding – are seen as a measure of financial security.

Last week councillors signed off on an audit report summarising the council’s accounts, with warnings that Brexit is leading to uncertainty over how much cash is available.

Councillors were also told that there could be improvements in how much council tax is collected – and that a no-deal Brexit poses a risk to the council’s safety cushion.

Auditor Paul Dosset at a meeting on Wednesday, July 17 said: “I think we see on the one hand a positive level of balances for the council but then we see lots of significant risks down the track.

“They include the fair funding review, the spending review when that takes place, and the impact of a no-deal Brexit. These reflect the position that in our view the council has the ability to shield against the threats going forward.

“Overall the position is sound but there is no room for complacency.”

Christine Grice, the cabinet member for resources, said the council faces a challenge to avoid  further dipping into its savings in coming years.

Cllr Grice said: “I am pleased that yet again we have a judgement of providing value for money. We have heard tonight the recognition that we face challenges now and, in the years, to come.

“The auditor has recognised our new budget monitoring systems and governance arrangements. We are not complacent, last week we met with the national audit office to look at how we strengthen our governance as we move forward with fewer and fewer resources.

“I want to highlight a comment that poses a challenge: The report quotes that auditors would recommend the use of reserves remains limited in future years other than for earmarked scheme – that is a considerable challenge for us as we have balanced our budget by drawing down reserves.

“It’s something we need to ensure that we have a strong budget monitoring system in place.”