A think tank is predicting that councils could face central government funding cuts of at least a third. Research from the New Local Government Network suggests authorities could lose more than 12 billion pounds, leading to cuts in services or increased charges.

In ‘Scanning Financial Horizons’, NLGN is warning that councils need greater financial certainty from Whitehall and more flexibility to raise local revenue if they are to cope with the cuts. It is recommending new ‘Place Agreements’ of shared public spending and wants authorities to have full discretion over Council Tax levels as well as being able to retain some income from business rates as an incentive to economic growth.

A survey of council Chief Executives and Finance Directors found the majority were expecting to cut budgets by between 20 and 25 per cent but almost a third expected the gap to be wider. The responses indicate that environmental services such as street cleaning and waste collection are most likely to be affected along with parks, museums and libraries.

A separate poll, conducted by Populus, showed widespread public opposition to reductions in local services, particularly to waste collection and social care. There was a lack of support for any cuts and a preference for increased taxation. The report’s author, Nick Hope said councils would face ‘a tsunami of funding cuts’ over this Parliamentary term.