Andy Burnham accused of £500m 'class war' as Labour councils set for 'funding boost'

Some town halls have reportedly even warned the Government it could be forced to impose council tax increases to cover the shortfall.

Conservatives and Liberal Democrats have accused ministers of "deliberately cutting funding" from affluent rural councils in order to bankroll urban Labour Party strongholds.

In response to the Telegraph's analysis, Councillors told the publication they are "looking down the barrel of a gun" and accused the Government of "choosing to force councils into a form of bankruptcy".

Elizabeth Campbell, the Tory leader of Kensington and Chelsea council, said: "The cuts are so enormous that they almost affect our very existence as a council."

Tory leader Kemi Badenoch has previously threatened legal action against the Government after Wandsworth's council funding was cut by 40 per cent, resulting in a 94 per cent council tax hike.

Appearing on BBC Newsnight, she said it was not fair that Wandsworth was forced to increase council tax to make up the funding gap.

Mrs Badenoch said: "I think it is outrageous that Wandsworth Council is having to put up council tax. But they’re not doing it because they want to.

"We have actually instructed lawyers, as the Conservative Party, to see if we can challenge the Government on this decision.

"Because what it looks like Labour is doing is taking money from areas that don't vote Labour and giving it to places that do vote Labour."

House of Commons data reveals councils where the Tories hold the most seats will see their central government-controlled funding reduced by 6.5 per cent from £4.4billion to £4.1billion for the years 2028 to 2029.

Liberal Democrat councils will also see cuts, a total reduction of 5.2 per cent from £3.9billion to £3.7billion over the same period.

The Prime Minister has previously vowed before taking office to deliver "growth in every postcode" and hand greater powers to local authorities.

Mr Burnham said: "The whole country suffers when the regions and nations are not meeting their potential and Londoners are left with an overheated economy and overcrowded housing market.

"We will never get growth up to the level Britain needs unless every single postcode is set up to contribute to it."

Earlier today, Mr Burnham announced he had struck a devolution alliance with the SNP, declaring "unions of countries are better" because you can "face a challenging world in a more confident and stronger way when you collaborate and work together".

A Ministry of Housing, Local Government and Communities spokesman said in a statement: "We’re fixing an outdated funding system so funding goes where need is greatest.

"As a result, nine in 10 councils will receive funding that broadly matches their need, up from only a third before our reforms, so they can deliver the high-quality public services local people need.

"This is alongside making over £78billion available for council finances this year, with the majority of money un-ringfenced, so local leaders can decide for themselves how best to spend on their priorities."