Councils warn of £20bn shortfall

Town hall chiefs will today warn George Osborne, the Chancellor, that local councils face a £20bn funding shortfall that will cost thousands of jobs and jeopardise services to children and vulnerable adults.

Council leaders will argue that a combination of cuts in government support and increased demand from the public will leave them short by between £12.5bn and £20bn by 2015.

The pressure comes from an ageing population and a rising demand for school places.

The Local Government Association adds that the figure could climb even higher if inflation continues to rise. Its analysis comes in a submission to Mr Osborne ahead of next month's spending review.