The role councils could play after Brexit will be examined by MPs on the Communities and Local Government Committee.
MPs will look at which powers currently held by the EU could be transferred to town halls after the UK leaves.
The committee will also examine the greatest risks and opportunities Brexit poses for local government and how the sector’s representation in the talks can be improved.
Committee chair Clive Betts said: ‘The previous communities secretary said last year that local government must be represented in the negotiations on the terms of the UK’s exit from the EU, but the role of local authorities post-Brexit is still unclear.
‘We hope our inquiry will help to clarify what the best possible outcome of those talks for local government would look like.
‘We will be investigating which powers local authorities could take as they are returned from Brussels, and explore how our departure from the EU might affect investment, development, and economic funding affecting local authorities.
‘We will also want to look at the employment of EU nationals and how local workforces may be impacted by Brexit, in areas such as adult social care and construction.’
The committee is expected to hold a series of evidence sessions running until early 2019, with the first session later this year aiming to clarify the key concerns of the local government sector.
Whitehall has committed to using European Structural Funds money that will come back to the UK after Brexit to create a shared prosperity fund.