The council could wipe out its overspend by the end of the current financial year which runs until the end of next month.
Council leader Bella Sankey said that she was determined to balance the books in the current financial year and added that an in-year overspend was dropping.
Councillor Sankey told the cabinet that the latest figures – from the end of December – showed that Brighton and Hove City Council risked being £3.3 million over budget in the 2024-25 financial year.
Spending controls have reduced the predicted overspend from the £10 million forecast last July.
She told a cabinet meeting at Hove Town Hall: “It is vital a council takes every step available to it to balance its books.
“With increased demand and costs over the last 12 months in statutory areas where this council has a legal obligation to deliver services, we had predicted a significant overspend.
“Spending controls, recruitment freezes and the introduction of innovative and different ways of working throughout the authority, however, have had a genuine impact.
“Our forecast overspend as of month nine (December) is now down to £3.31 million. That represents 1.3 per cent of the net budget and approximately 0.7 per cent of the gross budget.
“We are determined to continue bringing this figure down and to break even – and my thanks go to all our staff here at the council who are working so hard to do so.
“I know these are difficult circumstances which is why our work on a medium-term strategy and our Labour government’s commitment to multi-year funding is so important. We need to end the hand-to-mouth approach to local government services.”
Deputy leader Jacob Taylor said in November that the overspend was going in the “wrong direction” as it had increased – and this led to more spending controls being put in place.
Increased costs and demand in adult social care, children’s services and homelessness had all adversely affected the council’s finances.
It had also missed its savings target, with £4.5 million out of £23 million not achieved.
He said: “We should be able to get into a position where we can come to a break-even position thanks to the hard work of officers.
“But clearly there needs to be a continued focus alongside the other important priorities including setting the budget for next year.”
Councillor Taylor told the cabinet yesterday (Thursday 13 February) that the recruitment freeze had had a significant effect on council staff.
