Local authorities serving the most deprived areas are struggling to provide services for their most vulnerable residents, a report has found.

The report by the New Policy Institute think-tank showed that 97% of cuts in spending on disadvantage were inflicted by the fifth most deprived councils.

It outlined how these deprived councils — typically northern metropolitan areas — have had to cut spending by 5% or £278m since 2011/12 due to reductions in Government funding.

The least deprived areas - mostly southern county council areas - have been able to maintain or even increase spending on services for people facing disadvantage in the last five years, the report claimed.

NPI also outlined how councils are being forced by austerity to shift funding away from preventative services in order to meet immediate crisis costs.

It found that in housing, preventive funding to help people stay in their homes has fallen 46% since 2011/12 while crisis spending - primarily on the costs of temporary accommodation for those who have become homeless – rose by 58%.

Paul Streets, chief executive of Lloyds Bank Foundation, which funded the study, said: ‘The Government needs urgently to look again at how it funds councils to enable them to provide and fund services for those who need it the most - regardless of where they live.'