Council bosses are facing up to a major funding shortfall as they try to provide essential support for disabled people in Darlington.
The borough council is considering ploughing more cash into disabled facilities grants (DFG) scheme, which allows residents to upgrade their homes, in order to keep up with the growing demand.
But senior officials have warned that such further investment could impact on other services.
In 2003/04, the council set a DFG budget of £270,000 but went on to spend £610,000 during the year.
For 2004/05, the same budget was initially set but was later increased to £484,000.
However, a new report reveals projections to the end of the year show demand will exceed the revised budget by almost £700,000.
The problem was highlighted earlier this year when the family of a 93-year-old woman told The Northern Echo how she was forced to pay for her own stairlift because the council did not have the cash.
A draft report to cabinet members, by social services director Margaret Asquith and community services director, Cliff Brown, says: "Given the present position, it will not be possible to progress many known cases during the current year, while new cases will also be added to the waiting list."
The budget for alterations to council properties also suggests an overspend of £331,000.
The report says: "Should additional resources not be made available there will be major implications.
"It is also very likely that dissatisfaction with the service will grow among DFG applicants and council tenants, and complaints will continue.
"However, if additional resources are applied to deal with the excessive demand, this will clearly reduce the resources available for other council priorities for which demand also currently outstrips resources."
The council has stressed that improvements to the service are being made.
DFGs for private residents are allocated following a recommendation from the occupational therapy team in social services.
Social services have increased the level at which minor adaptations to homes are paid from their own resources without being referred to the DFG budget. That has risen from £170 to £400.
The authority's social affairs and health scrutiny committee will consider the matter next week.
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