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One in three town halls fear they will run out of money to provide services such as adult social care, protecting children and preventing homelessness within three years.

Local authorities must provide these services by law.

But the Local Government Association estimates councils face an £8billion funding black hole by 2025.

Some 17% of local authorities fear they will be unable to make all the savings they have identified to make this year, according to a poll.

(Image: Wales Online)

An unprecedented rise in demand means many councils are having to spend more than planned in adult social care, children’s services and homelessness support.

Between 2010 and 2020, councils will have lost 60p out of every £1 they had from central government to run local services.

LGA chairman, Tory peer Lord Porter, said: “Councils in England face a funding gap of more than £3billion next year, rising to £8billion by 2025.

“As this survey shows, if the Government fails to adequately fund local government there is a real risk to the future financial viability of some services and councils.

“Councils would normally have started their budget-setting planning process but remain completely in the dark about how much funding they will have next year.

“Communities relying on the vital local services that make a difference to their lives deserve better.”

Lord Porter called for whoever wins the Tory leadership contest to put town hall funding at the top of his in-tray.

“Securing the financial sustainability of local government must be the top priority for the next Prime Minister,” he said.

“Urgent guarantees are needed that councils will have the funding they need to ensure our vital public services survive the uncertainty ahead.

(Image: AFP/Getty Images)

“With the right funding and powers, councils can continue to lead their local areas, improve residents’ lives, reduce demand for services and save money for the taxpayer.”

He spoke out as 1,400 local government leaders, councillors and ministers gather at the LGA’S annual conference in Bournemouth.

Shadow Communities Secretary Andrew Gwynne said: “This failing Government has neglected our communities and is ignoring the calls to properly fund our public services.

(Image: Daily Mirror)

“Our councils keep our streets cleaner and safer, protect the most vulnerable in society, and maintain our green spaces - but a decade of austerity has eroded these vital services away.

“This will be the legacy of the Tories and their coalition with the Lib Dems - a decade of neglect.

“Unlike the Tories, the next Labour Government will genuinely end austerity and put an end to this crisis, ensuring that our local services have the sustainable funding that they need.”

A Ministry for Housing, Communities and Local Government spokesman said:“Councils are a vital link to meet the needs of residents, that’s why we’re providing local authorities with access to £46.4billion this year – a real terms increase – including extra funding to support some of our most vulnerable groups.

“Ultimately councils are responsible for managing their own resources and we are working with local government to develop a funding system for the future.”