Council departments are being told to ‘think creatively’ to save money because they are overspending their budgets by millions.

Cheshire East is set to overspend by more than £13 million by next April. More than £12m is within adult social care and children’s services departments.

The council admits that mounting budget pressures now call for ‘urgent’ action and is demanding ‘action plans’ from service managers.

CEC finance chief Councillor Frank Keegan said: "It is a decent challenge but we are confident we will do it. It is a constant battle to save.

"We are asking service managers to think creatively about how they can save money – for example merging departments.

"There are lots of things we don’t need to be doing at the level we are doing.

"The health service and schools are ring-fenced but other departments are facing these cuts."

He did not rule out further job losses to help meet the need for savings.

In adult services, rising care costs have resulted in a projected £5.8m overspend. The council says this is because more people are seeking financial help from it to combat the economic downturn.

In the children and families area, the overspend forecast is £5.7m and in highways, planning and technical services it is £1.2m.

According to Coun Keegan, council departments face cuts of up to 25 per cent in grants from central government over the next four years.

He said a comprehensive spending review by the Coalition Government in November was crucial to how council finances would look in 2011.

Council Leader Wesley Fitzgerald said: "Some of the reductions required may be challenging and could mean spending reductions in other areas.

"I would reassure our residents that any proposed reductions will undergo careful consideration before any final decisions are taken."