Councils have told the Audit Commission they are ‘well aware' of the tough economic future ahead. The LGA played down the spending watchdog's offer of a self-help guide to delivering services with a reduced income. The report, Strategic financial management in councils, offers advice to check if financial management is fit for the future. It is the first key announcement since communities secretary Eric Pickles announced he was abolishing the commission. Chief executive of the Audit Commission, Eugene Sullivan, said: ‘Coping with falling income and increased demand is a delicate balancing act for councils. ‘The trade-off is between cuts to meet the immediate challenge, and preserving long-term capacity to deliver essential services. What matters is the quality of planning over a realistic time frame, and a well judged assessment of future risks.' But John Ransford, chief executive of the LGA, said: ‘Councils are well aware of the scale of the cuts they are likely to face following next month's spending review and are planning for the very difficult decisions they will have to take in order to keep front line services running.'