Councils can be squeezed for more cash despite already enduring years of cuts, communities secretary Eric Pickles has warned.

Giving evidence to the communities and local government committee yesterday, Mr Pickles said there was still ‘money that we can get out of the system’.

He said: ‘I still think that there is room for greater efficiencies inside local government.

‘It is certainly my view that it is possible to produce good local government at a still lesser cost.

‘Some of the criticisms that were made at the beginning that it would be the end of local government, that local government was simply not going to be able to cope, have proved not to be the case.’

Mr Pickles suggested a 2% saving in procurement would generate £1bn a year.