Lancaster City Council estimates it will have £3.4m in its bank account by the end of this financial year.
The council could also have an estimated £776,000 to spend council housing. An amount of £86,300 has been carried forward as underspent in 2012/13.
During this financial year, the council recovered £468,000 of money invested in Icelandic banks. By March 31, the council expects to have been paid back £5.2m of a £6.3m claim against Iceland which collapsed in 2008. It aims to eventually recover a total of £5.9m.