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Charnwood Borough Council The council will set its 2012/13 budget in December
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Further savings of £1.2m will have to be made by a Leicestershire council in the next three years, the authority has revealed.
Charnwood Borough Council has already cut budgets by £2.9m since 2007, to cope with a drop in funding.
The Conservative-run authority said it hoped to hit the target without having to cut jobs or services.
Opposition Labour group members said they would oppose any major increases to council tax.
The government grant to the council is being cut by £1.14m, from £9.74m in 2011/12 to £8.6m the following year.
Labour 'sympathetic'
Thomas Barkley, cabinet member for finance and resources, said cash reserves built up over previous years would help soften the impact of the cut.
He said the council was still deciding where savings could be made before it sets next year's budget in December.
He said: "We're asking each director within the council to come up with savings and envisage being able to do this without cutting services."
Robert Sharp, Labour group deputy leader, said he had some sympathy for the challenge facing the Tory council.
"If we can identify services that we can run more efficiently and get more for less we will support Tom," he said.
"Where the Conservatives are wanting to cut key services or put up local charges too far, we will oppose."
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