The Government has been accused of inventing new measures for council spending to back up ministers’ arguments and gloss over cutbacks.

Clive Betts, chair of the CLG select committee, said ministers had failed to clarify calculations in the Spending Round that showed a 2.3% real terms fall in local government expenditure over the next two years.

Using the DCLG’s agreed measure of council spending power the figure would have been 3.3%, rising to 7.1% if the new Better Care Fund was taken out of the equation.

‘An essential part of select committee scrutiny is testing the Government’s figures,’ said Mr Betts. ‘It is frustrating that the Government has an established measure for presenting local government spending power, but, rather than use that method – I assume because the figure wasn't rosy enough – the prime minister comes up with a "better" figure based on an unexplained new methodology.’

He said the Government had used a range of different figures using different measures. ‘Ministers have to stop quoting whichever figure best suits their argument on any given occasion. Without an agreed single measure of local government spending power there can be no public transparency or open debate on council funding.’

Rather than use the agreed measure for the latest Spending Round, the Treasury ‘chose to invent a new measure of local government spending’, he said.

A spokesperson for the DCLG said: 'The Local Government Settlement for 2014/15 has been published in full since February, which clearly shows how individual councils’ spending power was calculated. This Department has used the same approach for each settlement since 2010.'

Sir Merrick Cockell, chair of the Local Government Association, said the lack of transparency was undermining councils’ efforts to deal with cuts. ‘Councils need to be able to make accurate financial plans based on clear information but recent funding settlements have failed to provide the certainty that councils need.?,' he said.

‘This uncertainty means councils are being forced to assume the worst and plan for it. This is damaging councils' ability to make well-informed financial plans and magnifies the impact of already significant cuts to funding for local services such as caring for the elderly, collecting bins and protecting children.????

‘The current public sector model, with its highly centralised control of budgets and spending priorities, is inefficient. It needs to be replaced with a better and fairer way of funding local authorities which delivers adequate money, distributes it fairly and provides the long-term certainty councils need to plan for future demands. We will continue discussions with government on an agreed definition of local government spending power – which does not include double counting.’