Local government could face annual spending cuts averaging 2.4% by 2029, with services expected to deteriorate as a result, a report has warned.

A study by the Institute for Government and Nuffield Foundation described the Government's inheritance on public services as ‘extremely precarious'.

It said the Government's spending plans from April 2025 onwards will mean that most services could be performing worse in 2027-28 than in 2019.

The report also warned that Labour's ‘incredibly tight spending plans' will mean the settlements for local government and other unprotected areas of public spending will decline by an average of 2.4% per year in real terms.

However, the think-tanks argued there were steps the Government could take to reform public services, including focusing on outcomes rather than inputs, prevention rather than acute provision, capital rather than day-to-day spending, frontline innovation rather than top-down command and control, and the contribution of staff to performance rather than their cost.