Local authority leaders have called for powers to be devolved from Brussels to councils post-Brexit after MPs warn of a lack of preparation for the UK’s possible exit from the European Union.

A report from the Housing, Communities and Local Government Committee has warned that Whitehall is ‘failing’ to support councils in their preparations for Brexit.

It urges the Government to maintain close contact with local authorities during any transition period, and stresses that there needs to be a ‘comprehensive range of planning, guidance and support’ available to councils in the event of a no-deal situation.

‘Whatever form of Brexit is finally decided upon, local authorities will play a key role in ensuring as little disruption as possible to people’s day-to-day lives,’ said committee chair Clive Betts.

‘They have the local knowledge and experience to identify likely problems and create workable solutions, yet the Government is not giving them sufficient support to do this, nor is it adequately seeking their input to identify problems and inform their planning.’

The committee said that Whitehall must take steps to address workforce shortages in the short term and ensure EU nationals working in the UK are encouraged to apply for settled status.

The Government must ‘urgently advance’ its plans for the establishment of the UK Shared Prosperity Fund, the MPs said. This fund is intended to replace the money that the EU gives to local areas across Britain, although it is currently unclear whether the amount of funding will be the same.

The HCLG committee also said Whitehall should make clear its plans for the further devolution of powers to local authorities post-Brexit, and publish its proposed new Devolution Framework within one month of the UK's withdrawal from the EU.

Responding to the report, Cllr Kevin Bentley, chairman of the Local Government Association’s Brexit Taskforce said that councils were ‘taking the lead’ on Brexit preparations.

However, he stressed that there remains ‘resource, information and advice gaps that councils are facing while helping their communities prepare.’

‘While it is important to stress that business and communities are being well supported by councils as the nation prepares to leave the EU, the LGA continues to identify the issues which need to be addressed at a national level to ensure more effective local work,’ he said.

Jonathan Werran, the chief executive of the think tank Localis, stressed that the devolution of powers to local areas was an important measure for dealing with the root cause of the vote for Brexit.

‘We are caught in the torturous and protracted throes of Brexit because significant numbers of people across England felt politically disempowered and disassociated from national growth – we can’t replicate that in the new environment,’ he said.

‘If we find ourselves in a situation where powers and controls vested unaccountably at supranational level in Brussels are only handed back to be jealously guarded by national Government in Westminster, many ordinary people will feel rightly a sense of betrayal.

‘Places need a sense of autonomy, pride and money, locally earned revenue that allows them to be self-sufficient and freed from dependence on the central state. This might entail some sort of loose English federalism, boosted by the transfer of powers and budgets from Whitehall.

‘When it comes to doling out money from the centre, the Shared Prosperity Fund and whatever replaces this in turn must be seen, felt and experienced to deliver economic and social uplift that impacts on the lives of ordinary people.’

Cllr Bentley of the LGA agrees. ‘In the longer term, Brexit cannot result in swapping Brussels for Whitehall,’ he said. ‘Devolving powers to local communities through local government must be on the agenda and we will be pressing hard for this post-Brexit.’

The County Councils Network welcomed the committee’s call for a new Shared Prosperity Fund and urged the Government to ensure the EU funding is matched.

‘Despite the focus on London and the major cities, residents and workers in county areas are likely to be affected the most by Brexit,’ said Cllr Philip Atkins, CCN’s vice-chairman and leader of Staffordshire County Council.

‘County areas received £4.1bn from the last tranche of EU Structural Funds, five times the amount the capital received - a recognition of their economic challenges and rurality.

‘It is imperative that these funds are adequately replaced. We support the committee’s calls that the new Shared Prosperity Fund matches or exceeds the present levels of funding and that government consults on the new arrangements as soon as possible.’