The LGA is concerned at the lack of take-up of benefits

The Department for Work and Pensions (DWP) has told councils there will be a 5% cut in real terms for the service.

The Local Government Association (LGA) fears this could result in a slower service and more of the poorest people in society not claiming their benefits.

The LGA said the cuts would result in either a reduced benefits service or "substantial increases in council tax".

Unclaimed benefits

LGA vice chairman Sir Jeremy Beecham described the proposed funding cut as "unreasonable and unfair".

He said: "Council tax benefit is failing those it is designed to help.

"If the government's proposals are implemented, it will result in a total real terms loss of almost £300m in subsidy grant over five years."

He added: "If the proposed cuts are implemented, this will result in a major reduction in the benefit service or substantial increases in council tax levels if current levels of service to the customers are to be maintained."

The LGA said an estimated £1.8bn of council tax benefits are left unclaimed every year.