Councils in England face a funding gap of almost £3bn over the next two years just to maintain services at their current level, a new analysis by the Local Government Association (LGA) has revealed.

The LGA said the cost to councils of delivering their services will exceed their core funding by £2bn this year and £900m in 2024-25.

If inflation followed the latest projections from the Bank of England, local authorities would face an extra £740m in cost pressures this year and an extra £1.5bn in 2024-25.

Chair of the LGA's resources board, 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 are being continuously hampered by one-year funding settlements, one-off funding pots and uncertainty due to repeated delays to funding reforms.

‘The Government needs to come up with a long-term plan to sufficiently fund local services. This must include greater funding certainty for councils through multi-year settlements and more clarity on financial reform so they can plan effectively, balance competing pressures across different service areas and maximise the impact of their spending.'