There is increasing financial pressure on education and children's services in the county of Conwy, warns a report.
This is because more young people are having to go outside the county as they need "highly specialised" provision, says the head of education services.
More young children are also being taken into care following high-profile cases such as Baby Peter.
The "most negative scenario" would mean £500,000 extra being required for 2011/12, says the report.
Councillors will be told on Tuesday that the education services budget for 2010/11 is projected to show a deficit of £600,000, but "judicial management" and a request to use reserves means this can be met.
In future, however, the situation could get tighter with the most "negative scenario" resulting in an extra £500,000 having to be found for 2011/12.
In the past, the council has been able to recoup some costs by charging other councils for the use of some of its services, but this is set to decrease.
Instead the council is faced with sending more children outside the county boundary, while fewer access Conwy-based facilities.
In particular children with autistic spectrum disorder and social, emotional and behavioural difficulties attend centres outside the Conwy area.
Costs for this provision vary according to the need of the child and the centre involved, but can range from £25,000 a year to £230,000.
"Conwy has a special educational needs school (Ysgol-y-Gogarth) which is designated for all types of pupils except those with social, emotional and behavioural difficulties," says the report by the county's head of education services Geraint James.
"In the past Denbighshire has used the school to a significant degree for pupils with profound and severe learning difficulties, but the development of their school (Tir Morfa) in Rhyl has resulted in reduced admissions at Ysgol-y-Gogarth."
This will mean decreased income for the council, it adds.
One way ahead may be to bid for European funding, the report says.
A reduction of the number of pre-16 pupils attending Ysgol-y-Gogarth will also mean a saving, while the "access criteria" of all services will be looked at.
The report says the assumptions made that there will be less demand on services as a result of falling pupils numbers is misleading.
"There are more children entering care which is to be expected following the increasing use of drug and alcohol by parents, and high-profile cases such as Victoria Climbie and Baby Peter", it says.
Baby Peter was 17 months old when he died with more than 50 injuries in August 2007, despite being on Haringey Council's child protection register.
Victoria Cimbie died in 2000 after being tortured for months by her great-aunt and her partner in north London.
The customer overview and scrutiny committee will be at the Conwy county offices at Bodlondeb, Conwy at 1800 BST on Tuesday.