The Local Government Association (LGA) has called on the Government to stop squeezing the budgets of local councils ahead of the Autumn Statement on 4 December.
Funding for council services like filling potholes, cultural and leisure facilities, and helping businesses to create jobs and drive economic growth has already been cut.
Four weeks out from the Autumn Statement, the LGA has demanded a period of financial stability to allow councils to plan for the largest, most sustained cuts to the funding for local services since the war.
Having delivered £10 billion of real-terms savings in the three years from 2011/12, local authorities have to find the same savings again in the next two years. As a result of these cuts, councils in many areas will not have enough money to meet all their statutory responsibilities.
The LGA, which represents 373 councils in England and Wales, believes the Treasury has a binding obligation to deliver the grant funding it has committed to provide to local government in 2014/15 and 2015/16 and warns that a failure to meet the existing commitment will push even more councils beyond breaking point. The cuts already scheduled for those two years amount to 21 per cent of total funding and will bring to 43 per cent the total cuts to local authority funding announced by this Government.
Local Government Association chairman Sir Merrick Cockell said: "The next two years are make or break for many councils and the Chancellor has it in his power to either deliver a stable environment in which they can plan for the unprecedented challenges ahead, or he can deliver uncertainty and risk which will put even more stress on vital local services and push councils toward failure.
"This Government is testing the resilience of councils to breaking point and in many areas the cracks are starting to show. 2015/16 is shaping up as the crunch year and we expect some councils to be placed in a position where they do not have the money they need to meet their statutory obligations.
"The severe and unprecedented squeeze on funding is already going to reduce by 66 per cent the money available for some of the most highly visible and popular services council provide. The Government must not exacerbate that problem by deepening the cuts in the Autumn Statement. Councils need a period of stability and consistency so they can plan for the unprecedented challenges which lie ahead."
