Cash-strapped Carlisle City Council is facing a potential £275,000 rental shortfall from The Lanes Shopping Centre.

The authority confirmed it had “scaled back” its income forecast for the shopping centre “in light of current market conditions” and would now take a more “cautious approach”.

But the centre has seen positive signs, with new arrivals that include the Joules clothing brand and Hotel Chocolat, while New Look relaunched at new premises in the centre - to the relief of its customers.

City council deputy leader Les Tickner stressed that the potential £275,000 shortfall would be the “worst case scenario”, estimating the final deficit would probably be closer to £175,000 by the end of March.

He added that the city council was doing “really well” in terms of the take-up of units across the city with Edinburgh Woollen Mill having just completed its multi-million-pound move to Carlisle.

The council is also looking to appoint a contractor to deliver a retail warehouse at Gateway 44, its industrial development site at Parkhouse Business Park.

But a council spokesman said: “We have scaled back our income predictions for The Lanes in light of current market conditions.

“The current fallout in the retail sector has had an impact on rental levels and it is only sensible that we take a more cautious approach in terms of income levels going forward.

“Although there are challenging conditions on the High Street, Carlisle is bucking the trend and performing well, a number of new retailers have joined us in The Lanes including Patisserie Valerie and Hotel Chocolate, we have managed to retain New Look in the centre and we look forward to welcoming further retailers in 2019.”

Alison Taylor, corporate director of finance resources, said the council was having meetings to see what “alternative arrangements” could be put in place to generate rental income.

“But we are at the mercy of the high street,” she said.

The shortfall was identified by officers looking at areas in which “income targets are not being achieved” and where there “could be a recurring impact”.

Other shortfalls facing the council include £23,000 rental income from the city centre, £17,000 from advertising and the loss of DWP funding worth £9,000.

The authority must save £1.237m by 2019/20 over and above the pressures and savings discussed by the Business and Transformation Scrutiny Panel.

David Jackson, commercial director of The Lanes, declined to comment until further details emerged of the “shortfall” identified by the council.

The other shortfalls facing the council include £23,000 rental income from the city centre, £17,000 from advertising and the loss of DWP Funding worth £9,000.

The council is also having to contend with some items additional spending pressures of £113,000, among which is a £60,000 increase in garden waste tipping charges.

The authority must save 1.237million by 2019/20 over and above the pressures and savings discussed by the Business and Transformation Scrutiny Panel this past week.