Leaders of Birmingham City Council are fighting to close a £37 million budget deficit as the strain of delivering huge spending cuts begins to be felt.

Four months into the financial year, the council is £23 million short of securing the £212 million of Government-imposed savings it has to find in 2011-12.

At the same time, the annual revenue budget for day to day spending is on course to end the year £14 million in the red if corrective action is not taken.

Senior members of the city’s Conservative-Liberal Democrat coalition are stressing that the gap will be eliminated and insist they won’t have to dip into an a low level of reserves to bring in a balanced budget.

Randal Brew, cabinet member for finance, is holding weekly “star chamber” meetings with council officers to thrash out ways of getting back on track.

Coun Brew (Con Northfield) said he was “extremely pleased” that 89 per cent of the most severe public spending squeeze for decades has been delivered or is on course for delivery. He added: “I am confident we will achieve this. I have great faith that the officer corps here will deliver against some very hard targets. We have got the systems in place, we were in a similar position last year at this time, and we closed the deficit then and we will do so again.”

The coalition backed a business plan in March which identified £212 million of cuts for 2011-12. But the highly controversial nature of some of the savings backfired when campaigners used the law to force the council to think again.

A successful judicial review brought by the families of severely disabled adults put paid to a move to save £17.5 million by scrapping council-funded social care packages for about 4,100 people with substantial needs.

Customers currently receiving care from the council would have been directed to seek help from private and voluntary sector providers instead under the scheme.

High Court judge Mr Justice Walker ruled the decision unlawful because of a failure to consult properly about the impact of the cut and that the council was in breach of its legal obligations under the Disability Discrimination Act.

A fresh consultation will be held into alternative proposals for adult social services savings, but the cabinet is yet to approve new cost-cutting ideas and Coun Brew admitted that the savings are unlikely to be delivered until next year.