A panel of experts warns years of cutbacks mean council services are “no longer sustainable” in their current form and the only solution is to make local government less reliant on Whitehall.
It recommends all money for health, education, policing and council services to be handed to areas with combined authorities, such as West and South Yorkshire.
The Independent Commission on Local Government Finance says these areas should have the freedom to set council taxes without Government interference, decide their own council tax bands and be given a share of income from national taxes.
Darra Singh, from major accountancy firm Ernst and Young who chaired the commission, said: “Local government and the services it provides are on a cliff-edge.
“Councils’ success at implementing cuts over the past few years has shielded people from the stark reality that the services they use can’t carry on as they are for much longer.
“The urgent need for reform is going to be one of the biggest and most important challenges facing the next government. Without it, many of the key services which have been part of everyday life for generations may not be there much longer.”
Yorkshire councils are in the process of setting their budgets for the coming year with most warning of the need to find millions of pounds in savings from services as Government funding is squeezed.
The Commission’s report argues that Whitehall should hand over powers and money so that areas can deliver services in an efficient way and decide their own local priorities.
The report has been published as Deputy Prime Minister Nick Clegg raised hopes that a devolution deal for West Yorkshire, under discussion since before Christmas, could be agreed soon.
He told The Yorkshire Post he had asked Greg Clark, the Minister overseeing the discussions, to “cross the Ts and dot the Is, which they have”.
He added: “All that we are waiting for now is for the Treasury to crawl over it as they always do.
“They always take much longer than I’d like but they will get there in the end and I’m confident that we will make the announcement on the Leeds growth deal either before or at the time of the Budget.”
Having initially had high hopes, West Yorkshire sources are playing down expectations for the deal after weeks of tortuous discussions with Ministers and civil servants which have seen deadlines come and go.
While there will be important elements of the agreement that give the area more control over its own affairs there is no expectation it will herald a fundamental shift of power from London.
Instead, when the deal is finally rubber-stamped it is likely to be presented as another step in the right direction.