The campaigning group Move Your Money has called on councils to make their cash savings work harder.

The group has published a toolkit, which includes information on how local authorities can move money around and support alternative forms of finance.

It also called on councils to review their banking arrangements and consider moving investments to providers that can deliver community benefits.

According to the group, councils have around £31bn in the banks and £1.9bn in building societies.

Last month, the Parliamentary Commission on Banking Standards criticised advice given by the Department for Communities and Local Government to councils about placing deposits with institutions with high credit ratings, which could prevent smaller banks from competing for business.

‘With councils under pressure to get more for less, securing social value from banking and investments represents a major untapped opportunity,' said campaign chief executive, Laura Willoughby.

‘Councils can move their money to somewhere better, deliver benefits for their community, and demand greater transparency.

‘It's about time councils leveraged their customer power and got the finance industry to help deliver investment and growth within local economies.'