London's local authority budgets have dropped by nearly a fifth  - 17% - per head over the last eight years, a new study has revealed.

The think-tank Centre for London found all principal service areas, with the exception of children's social care, have suffered budget reductions since 2010/11, with planning and development, highways and transport and cultural activity budgets facing the largest cuts.

Planning and development budgets have been hit by a 59% cut while highways and transport budgets have been slashed by 54%.

Cultural activities budgets have dropped by 42%.

Inner London boroughs have made the biggest cuts, with Westminster (-32%), Newham (-30%), Tower Hamlets (-29%), Hackney (-28%), Camden (-25%) and Wandsworth (-25%) all reporting cuts of 25% per head or more.

Only two councils, Barnet (+1%) and Kensington & Chelsea (+10%) have reported increases over the last eight years.

Research manager at Centre for London, Silviya Barrett, said: ‘London boroughs, like other urban authorities across the country, have shown great ingenuity in adapting to hard-hitting cuts, but they are running out of road.

‘The drive for devolution seems to be stuck.

'It's time to give the UK's distinct localities the power and resources to set local tax levels and raise their own taxes.

‘This would put service delivery back on a sustainable path, reducing the sense that local areas are competing for one pot of funding.

‘Fiscal devolution would also ensure decisions are taken as close as possible to those they affect, enabling boroughs to better shape services to suit their own local needs and strengthen their communities.'

Chair of London Councils, Cllr Peter John, said: ‘Centre for London's analysis is yet another stark warning about the huge financial pressure councils are under.

‘Boroughs cannot deal with austerity for much longer.'

Deputy leader of Westminster City Council, Cllr David Harvey, said: 'We need to have a grown up and wide-ranging conversation with the Treasury on how we finance local government and come up with a sustainable model.

'At Westminster, we are seeking local answers. Last year, we pioneered the community contribution to encourage Band H council taxpayers to contribute more voluntarily to their locality.

'Now Westminster is willing to go a step further, by piloting new taxes and levies related to service use and using the revenue to invest in our communities.'