Government cuts are putting vital services at risk while disproportionately hitting deprived areas and core cities, local government leaders have claimed.

In an open letter to secretary of state for communities and local government Eric Pickles, council leaders from Liverpool, Birmingham, Nottingham, Sheffield, Newcastle, Manchester and Leeds have urged ministers to engage with them and discuss difficulties posed by reductions in central funding.

The letter warns that financial cuts have formed ‘a looming financial crisis in the nation’s largest cities’ which is putting many non-statutory services ‘at risk of disappearing’ due to the prioritisation of funds.

‘It makes no sense to invest in economic development and infrastructure whilst at the same time the basic services upon which our cities depend are being systematically under funded,’ the letter claims.

Announcements of a further 2% budget cut in 2014/15 by chancellor George Osborne in his Autumn Statement combined with the likelihood of further reductions to come ‘may be the straw that breaks the camel’s back’, the letter says.

It warns that the ‘excessive cuts in local services’ remain ‘counterproductive’ and will place ‘spending pressures on central government departments’.

The letter says: ‘The percentage cut for some of the most deprived areas is double the average across the country. It has become clear that amongst the worst hit areas are the core cities and our city regions, where we are facing some of the most intense pressures on services and where the sheer scale of the cuts will be most apparent.

‘The cuts have also been unfairly distributed across Whitehall and between local and central government, with no other department facing anything like the level of reduction that local government as a whole and the big cities in particular are having to deal with.’

Manchester has achieved £170m of savings since 2011/12, yet has lost 2,025 full time or equivalent staff, faces an estimated £80m funding gap over the next two years and expects to lose up to 900 further staff.

Savings of £275m have been made in Birmingham alongside a 25% reduction in staffing. However, a 50% reduction in the controllable budget of £1.2bn will have to be made by 2017, with £110m cuts set for 2013/14.

‘We want to engage in a genuine and honest dialogue about how to restructure the funding system and implement reforms such as community budgets and we would urge you to take that forward without delay. But right now we are seeking an urgent meeting as you announce next year’s settlement so that we can find ways of averting the worst of the damage that might otherwise be inflicted next year,’ the letter states.