The financial settlement will leave two-thirds of councils millions of pounds worse off in 2017/18 - with 201 districts pushed towards ‘financial tipping point’ - council leaders have warned today.

The Local Government Association (LGA) is calling on the Government to reverse unexpected reductions in New Homes Bonus (NHB) payments to councils and find 'genuinely new money' to properly fund social care.

Analysis by the LGA also showed that 57 social care authorities will lose more in New Homes Bonus than they gain in the Adult Social Care Support Grant.

The research found councils would need to achieve growth of greater than 0.4% before they receive any NHB payments.

Lord Porter, LGA chairman, said: ‘No new money from central government is being provided to councils in 2017/18. In fact, more than two thirds of councils will actually be worse off next year than they were expecting.

‘Councils need government to reverse New Homes Bonus cuts next year and fund the Adult Social Care Services Grant with new money. This would avoid councils from having to make deeper than expected cutbacks to local services in 2017/18 and would provide some short-term support to councils providing social care.’

Norman Lamb, Liberal Democrat shadow health secretary, said that local councils are being 'gradually starved of cash'.

'If these cuts go ahead, vulnerable elderly people will suffer and services will struggle to meet basic needs such as washing, dressing or getting out of bed,' he said.

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