COUNCILS across England and Wales are £3 billion short of just being able to maintain existing levels of austerity-hit services, local authority bosses warned today.

The Local Government Association (LGA) stressed that 40-year-high inflation could force councils to make yet more cuts or raid financial reserves to balance their books, as it urged Tory ministers to provide extra funding.

The cost of delivering services at current levels will exceed core funding by £2bn this year and £900 million in 2024-25, it predicted.

The association’s resource board chairman Pete Marland said: “Inflation, the national living wage, energy costs and ongoing increasing demand for services are all adding billions of extra costs onto councils just to keep services standing still.

“Councils’ ability to mitigate these stark pressures is being continuously hampered by one-year funding settlements, one-off funding pots and uncertainty due to repeated funding reform delays — the government needs to come up with a long-term plan.”

It must include “greater funding certainty for councils and a balance to competing pressures across different service areas,” the councillor demanded.

A government spokesman claimed that its latest budget settlement makes available “almost £60bn for local government in England — an increase of 9.4 per cent on last year.”

The LGA’s three-day annual conference in Bournemouth kicked off today, with deputy Labour leader Angela Rayner among the speakers due to address delegates.

The Ashton-under-Lyne MP is set to promise that a future Labour government will ensure that community decisions are taken by “people with skin in the game.”

Following the party’s pledges to devolve power away from Westminster, she is expected to use her speech to commit to giving local people a “bigger stake” in the future of their communities.