Councils may be unable to fund services such as parks, highways and refuse collections by the end of the decade, under concerns unveiled in a new report.

Research from APSE and NPI warns that by 2020, capital spending by local government will be at its lowest level since 1948.

The report, 'Sustainable local government finance and liveable local areas: Can we survive to 2020?’ reveals that council tax will account for at least half the money coming in to all English local authorities by 2020.

This figure increases to three quarters for shire counties, meaning shires and districts For will be almost entirely reliant on council tax and business rates to fund services.

Paul O’Brien, chief executive of APSE, said: ‘With huge funding pressures on local councils this report highlights the hidden costs of decline in council finances. Whilst new funding for social care is of course welcome, the overall picture for local council finances remains grim.

'Without adequate funding we risk abandoning liveability services like parks, refuse and recycling, highways, and street lighting to long term decline.’

The report warns that allowing liveability and public realm stories to decline through a lack of funding, will force up ancillary care demands at a neighbourhood level.

The research also warned that a 'new dimension of inequality' is opening up according to how strongly an authority can grow its business rate income. Dr Peter Kenway, lead research author from NPI, explained: 'The new financial framework for local authorities breaks the link between need and source funding.

'There are no guarantees that ability to raise business rates will match needs in the most deprived areas.'