A group of local authorities have called on the Government to delay the overhaul of how councils are funded until uncertainty over Brexit lifts.

Central London Forward has urged Whitehall to pause the spending review and the new fair funding review due to the ‘unprecedented turbulence in politics’ caused by the Brexit debate.

The group, which represents 12 councils in the capital, said the Government should instead introduce a one-year spending statement based on current levels of funding plus inflation to give confidence over the next year.

‘We are living through an era of unprecedented turbulence in politics. The public, businesses, everybody is waiting to see how this process will play out – nobody knows, and it is paralysing the country,’ said Cllr Nickie Aiken, leader of Westminster City Council.

‘This is not the time to introduce such fundamental changes to local authority funding that is adding unacceptable levels of uncertainty. The sensible thing is surely to pause both the spending and fair funding reviews while these national issues are resolved.’

Uncertainty about local government funding is made worse by the fact that the Treasury has not indicated whether any spending review would include a ‘Brexit bonus’ for councils, Central London Forward added.

‘We need to get serious about how we fund our public services. Local authorities need the visibility to plan for the long term, or I fear the services the public rely on in central London face an uncertain future,’ said Cllr Aiken.

‘We need to help the Treasury to work with local government to bring forward more innovative approach to self-funding councils at a local level.’

The Government’s fair funding review includes potential changes that could see large movement of funding from some councils. One study, cited by Central London Forward, has suggested London Councils stand to lose £500m.

Cllr Richard Watts, chair of Central London Forward, said: ‘Central London boroughs are working tirelessly to support our residents and businesses.

‘Every day we work with young people to help them on the path to better futures, help people find good, well-paid work and help local businesses to grow.

‘The Government’s proposed changes to the local government funding system will leave us unable to deliver these crucial services that our residents and economy rely on.’

A Government spokesperson said Whitehall will be looking at funding for services as part of the Spending Review, the timing of which was up to the Treasury.