Chancellor George Osborne’s Spending Review introduced a 2% precept on council tax for social care, an increase in house building and further cash for infrastructure. 

Announcing the Spending Review in the House of Commons: ‘By the end of this Parliament, local government will spend the same in cash terms as it does today.’

However, his claims have already been dismissed by chief executive of Chartered Institute of Public Finance and Accountancy, Rob Whiteman who tweeted: ‘The claim councils will spend as much as now by parliament end will include some deft and dodgy arithmetic on devolution.’

Local government will face a 56.3% cut to grant in real terms by 2019/20, according to figures from the Department for Communities and Local Government (DCLG). 

Communities secretary Greg Clark claimed councils would ‘need to continue to play their part in cutting the deficit’.  

He added: ‘They will still have almost £200bn to spend on local services over the lifetime of this parliament - a reduction of just 1.7% in real terms each year.

‘We have listened to calls from local government to provide more support for adult social care, with a £3.5bn investment to help support elderly and vulnerable people. 

‘Together with our radical devolution agenda and reform of business rates, we are giving local leaders sweeping new powers and financial freedoms to boost local growth and create jobs.’ 

Figures released by the DCLG showed grant dropping from £11.5bn in 2015/16 to £5.4bn in 2019/20 – a drop of 56.3% in real terms.

He told Parliament: ‘It’s a false choice; if you are bold with your reforms you can have both.

‘That’s why, while we’ve been reducing government spending, crime has fallen, a million more children are being educated in good and outstanding schools, and public satisfaction with our local government services has risen.

‘That is the exact opposite of what our critics predicted.’ 

Launching a spending review which put local authorities centre stage, Mr Osborne described his four priorities as: 

• integrated health and social care
• a devolution revolution with infrastructure investment 
• tackling social failures, and 
• protecting national security. 

As part of his efforts to address the housing crisis, Mr Osborne doubled cash for housing, and pledged to fund an extension of right to buy with a tax on second homes and buy to let properties. He also announced extra proposals to tackle the acute problems in London. 

Plans for a 2% precept on council tax for social care, which had been widely leaked before the announcement, were accompanied by a further £1.5bn by 2019-20 for the Better Care Fund. 

Other measures included:

• a u-turn on controversial plans to cut tax credits
• a ‘big package’ of new powers for devolution
• the confirmation of proposals on business rates 
• allowing local government to keep 100% of the receipts on asset sales
• an apprenticeship levy to boost skills – and co-locating job centres in local authority buildings
• the removal of local authority involvement in schools 
• increased investment in infrastructure