Bristol City Council is facing £30 million of cuts and job losses during the next three years as the recession hits its income.

With 16,000 staff the council is the city's biggest employer and, even though the authority plans a re-structuring programme to minimise the effect of the cuts, compulsory redundancies cannot be ruled out.

Council officers predict a £30m black hole in funding due to:

A drop in council tax revenue because more people are on benefit due to the recession.

A slowdown in housebuilding, which has had a knock-on effect on income from planning fees.

An expected reduction in grants from the Government.

On top of this, the demands for more services are growing because:

The number of people in the city is growing – most of us are living longer and need care as we get older.

The council is under increased pressure to provide more childcare because of new legislation.

The council's deputy chief executive Jon House said: "This is one of the most difficult financial situations that the council has ever faced."

But he insisted the authority would not embark on "salami slicing" – indiscriminate cuts across the board, irrespective of need.

Instead, councillors and officers want to plan ahead by restructuring the way services are delivered.

Mr House believes that the same quality of services can be provided if they are managed more efficiently.

One of the ways to do this will be by forging links with other public bodies, such as health trusts, to share workloads and avoid duplicating jobs.

The estimated £30m cuts actually mean cumulative savings of £62m over three years. This is because the cuts of £12m in the first year are also carried over to the second year when there are expected to be further cuts of £8m.

In the third year, when an estimated £10m cut is expected, there will already be a cumulative saving of £32m from the previous two years' budgets, plus £20m of savings carried over for that year's budget.

Mr House said the council had already saved £3m a year by restructuring its top management team and reorganising them to work from one shared office.

Council leader Barbara Janke said: "We realise that we face tough decisions ahead. But we want to do this in a responsible way which is best for the future of the city.

"We are prepared to face up to the challenge."

The council is setting up a panel of experts from business, universities, public bodies, and other fields such as communications and finance, to try to work out effective solutions.

MPs will also be urged to lobby at local and national level for more funding from the Government.

Mr House stressed that the figures were only estimates.

The Government normally only reveals its level of grant support in November.

But Gordon Brown has said that the level of public sector spending will not be announced until after the next General Election.

Mr House said the best way to ensure that the quality of services only not affected was by tackling the issues now.

This autumn, the council is expected to put forward proposals for re-structuring.

Finance director Peter Robinson said the council had a good track record for avoiding redundancies.

He said the redeployment of staff and job losses through natural wastage had been very effective in the past.

The council's net budget for this year 2009/10 is more than £365m, with council taxpayers paying an average £1,312.70 a year, a figure which does not include precepts for police and fire costs.