Local Government Assocation chairman, Sir Merrick Cockell, said: ‘This cut will stretch essential services to breaking point in many areas. While positive steps have been taken to target NHS funding at social care, the fact remains that some councils will simply not have enough money to meet all their statutory responsibilities. 
 
‘Today's 10% cash cut comes on top of the 33% real terms cut already made to council budgets and confirms local government as the hardest hit part of the public sector.
 
‘It's disappointing that a feudal approach still exists in relation to local government funding.
 
‘The Government's support of Community Budgets signals that the Treasury and No 10 are behind the necessary rewiring of public services. It is absolutely essential that all of Whitehall signs up to this radical reform ‘

Chairman of the District Councils' Network, Cllr Neil Clarke said: ‘In addition to these steps district councils must be given more financial freedoms and local flexibilities to mitigate funding reductions.

‘Examples include greater freedoms over council tax and proper funding to implement any freezes; lifting the HRA borrowing cap; localising planning and licensing fees; and retaining a larger share of business rates growth.'

Joanna Killian, Chair of the Society of Local Authority Chief Executives (SOLACE) said: ‘This spending round has made some important steps forward and removed some of the Whitehall red-tape from decisions that should be made in local communities.

‘But local councils are running out of ways to save money alone and that puts the future of local services on the line. Council Chief Executives will continue their push for greater local decision-making and coordination across local services.

‘We hope the Government plays its part by stimulating more innovative reform and ensuring Whitehall departments play their part.'

According to Steve Freer, chief executive for the Chartered Institute of Public Finance and Accountancy (CIPFA): 'The government has argued that when other measures are taken into account, such as powers to raise additional local income and other central government funding, local government spending reduces by only 2.3%.

However all of these measures are contingent upon factors largely outside of local government control. The ability to increase revenue from now largely localised business rates is dependent on a growing economy, and individual central government funding streams are neither guaranteed in the long term nor distributed evenly across the country.

In addition, the announcement of a council tax freeze grant for a further two years will only add to authorities medium to long term financial pressures and permanently reduce their resource base.

Alex Thomson, chief executive for the Localis think-tank said: ‘I'm disappointed, if not surprised, that local government has been clobbered again.

'And while I'm delighted to see more cash to promote further health and social care integration, it is clear that until we see a fundamental shift in the relationship between central and local areas, local public services will never be able to break free from the shackles of Whitehall.'
 
Dr Jonathan Carr-West, chief executive for the Local Government Information Unit told The MJ the Spending Review's impact on the sector proves the old saw that ‘no good deed goes unpunished'.

‘You save and then as a reward you get another 10% lopped off. 'There will be a sense in the sector that it doesn't feel very fair, when is enough enough?'

Dr Carr-West said the announcement falls short of the sort of radical transformation of the public sector the sector needs, and said a question remains as to whether it gives local government enough to do what is asked of it.

Commenting on comments made by Conservative Party chairman Grant Shapps that councils should make use of their £16bn cash reserves, Dr Carr West said such an approach would be unsustainable.

‘What we're being told equally is that this is not a rainy day, this is a permanent change of climate and government needs to get used to operating in a utterly transformed landscape and with far less.  Spending reserves isn't the way to do this.'

‘You can't have it both ways.  If you're going to say look, local government, you need to make these savings, you need to be radical, then you really have to put your money where your mouth is and create real financial autonomy, create real ability to join things up.'

Paul Dossett, partner and head of local government at Grant Thornton UK LLP said: ‘By tasking local government with finding additional efficiencies, the Chancellor is asking the public sector's star pupil to rise to the challenge in the knowledge that it alone among the public services has the focus, innovation and the wherewithal to succeed.
 
‘While councils will undoubtedly feel the pressure of the announced cuts, many will be capable of weathering the storm based on prudent survival and, indeed, growth techniques introduced over the past few years.

‘Although, for some, the jury is still out on whether they'll be able to keep their heads above water for much longer. For many councils the proverbial wolf is not still just heading inexorably up the garden path, he is starting to blow the house down.'

Dave Prentis, General Secretary of UNISON, said: 'Today's spending review reveals the true extent of the Government's failure.  The Chancellor has got it horribly wrong - despite all the promises, the austerity measures and cuts, he still hasn't got the country out of recession.  We are still in the slowest economic recovery in 100 years and yet all we get from this Chancellor is more of the same.