Spending pressures on councils revealed with dwindling reserves available

Councils are facing a £5.8 billion funding gap by the end of the decade unless they are given access to new finance, the leader of local authorities in England is warning.

Local Government Association (LGA) chairman Lord Porter of Spalding says that by 2020 English councils will have lost 75p out of every £1 they received in core central government funding in 2015.

Addressing the LGA's annual conference in Birmingham, he will say local authorities should be at the "front of the queue" for additional support if the era of austerity is finally coming to an end.

The LGA says that even if councils stopped filling in potholes, maintaining parks and open spaces, closed all children's centres, libraries, museums and leisure centres, turned off every street light and shut all discretionary bus routes, they still would not have saved enough money to plug the gap.

It is now pressing the Government to lift the cap on council tax which means that authorities must seek approval through a local referendum if they want to raise it by 2% or more.

It also wants councils to keep all of the £26 billion they collect each year in business rates as would have happened under the Local Government Finance Bill which was introduced in the last parliament.

However the bill failed to complete its passage before Theresa May called her snap General Election and was not re-introduced in last week's Queen's Speech, raising doubts as to whether 100% business rate retention will now go ahead.

In his speech, Lord Porter will say: "Councils can no longer be expected to run our vital local services on a shoestring.

"We must shout from the roof tops for local government to be put back on a sustainable financial footing.

"Local government is the fabric of our country, even more so during this period of uncertainty for the nation.

"Councils are the ones who can be trusted to make a difference to people's lives.

"To build desperately-needed homes, create jobs and school places, provide the dignified care for our elderly and disabled and boost economic growth.

"If austerity is coming to an end, then we need to make sure councils are at the front of the queue for more money.

"Only with adequate funding and the right powers can councils help the Government tackle the challenges facing our nation now and in the future."

A Government spokesman said councils had been given the "vital certainty" to plan ahead through a four-year funding settlement, while a new precept had eased the pressures on specific areas such as adult social care.

"Ministers have committed through a manifesto pledge to further help local authorities control more of what they raise and we're working closely with the LGA to agree the best way to achieve this," the spokesman said.

Communities Secretary Sajid Javid will use the conference to launch a £2.3 billion fund to pay for infrastructure to support new housing developments.

The Housing Infrastructure Fund, first announced last November, will support the creation of roads, utilities, schools and other facilities.

"By investing in local infrastructure, we can help unlock building thousands of new homes in the areas where they are needed most," Mr Javid said.