Councils are increasingly downbeat about the impact of Brexit, with nearly three quarters (71%) of chiefs expecting it to have a ‘negative’ or ‘very negative’ impact on their local economy.

Those who expect it to have a positive or very positive impact have halved to 5% since March 2018, according to the New Local Government Network’s (NLGN) latest Leadership Index.

Almost half of Conservative-led councils (46%) expect Brexit to have a ‘negative’ or ‘very negative’ impact on their local economy, and only 11% thought it would have a ‘positive’ or ‘very positive’ effect.

The leadership index is a quarterly survey of council leaders, chief executives and mayors across the UK, asking recurring questions on confidence levels across key service areas, alongside topical questions. More than three quarters (79%) of respondents to the latest survey said they have had to divert resources from key public service priorities to prepare for Brexit.

According to the index, despite the challenges presented by Brexit uncertainty, councils have been focusing on 'strengthening local and regional partnerships, preparing local businesses, and ensuring continuity of local services'.

Director of the NLGN Adam Lent said: ' As the Brexit saga rolls on, hope is being drained from the people in the driving seats of our local areas, with optimism hard to come by, even in Tory-led councils.

'Wherever you stand on the UK leaving the EU, it is clear that Brexit has already exerted an economic toll, stripping resources from vital services that are already eroded by years of cuts.

A MHCLG spokesperson said: 'Local government is playing a vital role in getting the country ready for Brexit and, to date, we’ve allocated £77m to support their preparations.

'We are working closely with local leaders to ensure our communities are fully prepared for Brexit, so they have the support they need and can benefit from the opportunities it will bring.'

The cost of Brexit is mounting - what can local authorities do to cope? (£)