Another £23m will be lost from Kirklees Council coffers when it is forced to cut council housing rents.
The cash strapped council is being ordered to reduce rents on all social houses from April.
The policy was announced by the Chancellor last July.
But its impact will come as a huge blow to the council after it found out in December its budget was being slashed by another £81m – worse than feared.
The government’s demand is for a 1% rent cut each year until 2019, shaving off millions of income that council finance bosses had not planned for.
The forced reductions will see average rents come down by just 72p a week to £70.60 from April 1.
But the cumulative impact is set to affect the service’s ability to maintain its 23,000-strong housing stock.
Clr Graham Turner described the news as a “blow”.
“It’s one we didn’t see coming,” he said.
“It came totally out of the blue.
“It’s a significant amount of money over the next four years.
“It’s money that would have been spent on repairs and things like that.”
Clr Turner said the policy was a “double whammy” as it meant the Chancellor would have less housing benefit to pay while also reducing income for councils.
Council documents also reveal fears that more tenants will struggle to pay their rents amid ongoing Universal Credit welfare reforms – further increasing the cash shortfall headache.
Papers for councillors say it is “inevitable that those people in receipt of Universal Credit will have rent arrears.”
The rent blow comes as the government’s controversial proposals to extend the Right to Buy scheme continue.
The government’s Housing Bill could see another 347 council houses lost in Kirklees.
Just six new council homes have been built in Kirklees since 2012, to replace the 403 lost to Right To Buy.
Kirklees has already lost about one third of its council homes since Right To Buy was brought in by Margaret Thatcher in the 1980s.
The Housing and Planning Bill is due to be read in the House of Commons today.
An attempt by the Liberal Democrats to “neuter the bill” has been tabled for a vote.
Meanwhile, a £7m shortfall in the overall budget for next year is set to be discussed by councillors in the next few weeks.
£83m has already been cut over the past five years, leading Clr Turner to dub the government’s economic plans as the “Northern Poorhouse”.