The city council managed to underspend its budget by nearly £1 million in the last financial year.

It spent £21.5 million of a £22.5 million budget for 2010/11 by making savings across departments and not filling staff vacancies when they arose.

The money has been put away in council reserves and could be used if the authority is forced to make future cuts if funding from central government is reduced in years to come.

A report before members of the council’s ruling Conservative executive stated that efforts to maximise savings had been successful.

It went on: "The council has plans to review the operation of service delivery in several areas, and must continue to look for service savings, and be prepared for any changes in circumstances that may need additional funding.

"The final outturn is therefore very pleasing and offers the council additional resource to deal with any unforeseen factors that may arise in the current financial year."

The council has also managed to recoup £2.5 million of the £4 million it invested in Heritable – a UK bank with an Icelandic parent bank – after Iceland suffered a financial crisis which started in 2008.

Cllr Peter Lee, the executive member for finance, described this a "very good" outcome so far, but said the authority was still waiting for £2 million it had invested in Glitnir another of Iceland’s ruined bank which eventually had to be taken over by the North Atlantic country’s government.