Energy bills, Pay settlements and rising social care costs have had an impact.
The East Riding of Yorkshire Council is set to overspend by £3.3m this year.
That comes despite the authority making £5m of cuts and using £7m pounds of its reserves.
Responding to a report on the council's finances, Leader - Jonathan Owen - says it's a difficult time for local government across the country.
A report to the Cabinet stated the £3.3m gap came in stark contrast to the £15m underspend forecast last year.
It also warned the £7m in reserves previously used to plug budget gaps was one-off money but those costs would become permanent.
The report stated:
“The overspend is projected due to the impact of exceptionally high inflation which has emerged since the council set its 2022-23 budget.
“There is considerable risk associated with projections at this early stage in the year, particularly due to the volatile inflation environment and costs could rise yet further above projections.
“The council has sufficient reserves to manage this risk but an overspend position will likely require a change to spending plans for earmarked reserves.”
Finance lead Julian Neilson told the Cabinet it the £3.3m overspend came despite £5m in cuts made this financial and £7m in reserves used to cover rising costs.
Mr Neilson said rising energy bills, higher than expected public sector pay settlements, mounting costs in health and work to clear social care backlogs had swelled the budget gap.
Council Leader - Jonathan Owen - says the council has been prudent and can cope with situation but he says there is a lot of uncertainty going forwards.
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