Local authorities face a funding shortfall of £3.2bn over the next two years, says the County Councils Network, which represents England's largest authorities.
The CCN issued the warning as councillors in Northamptonshire met to sign off plans to reduce services to the statutory minimum in an effort to save £70m this year.
East Sussex County Council is also planning to implement a ‘core offer’ unless the government provides additional financial resources.
The CCN represents 36 county authorities covering 47% of the English population. Its concerns echo those of the Rural Services Network, which has campaigned for years on the issue.
It argues that a combination of funding reductions, rising demand for services and ‘unfair funding’ means county authorities are most at risk of ending all but essential local services to avoid being unable to set a balanced budget in future years.
While accepting that Northamptonshire had “not managed austerity well” and there was clear evidence of failure, other high performing authorities such as East Sussex wouldn’t be the last to set out a core offer without additional help, it said.
The CCN is calling on the Treasury to “better understand the pressures we are under” and support local government with short-term resources for the next financial year, ahead of a longer-term deal in the spending review.
New figures produced by the network recently showed their councils face funding pressures amounting to £3.2bn over the next two years alone, £1.8bn of which is due to projected demand and future inflationary pressures.
A separate questionnaire of council leaders showed that unless Government provides additional funding there are rising concerns they will not be able to deliver balanced budgets in the coming years.
With no detail on the long-term funding plans for councils beyond 2020/21 just one third (33%) were confident they will be able to deliver a balanced budget that year without an extra cash injection. In total 66% are ‘not confident’ or ‘neutral’.
County councils also say that ‘unfair’ funding means that they are least able to avoid stripping back services to the legal minimum. Shire counties receive £182 per head from core government grants for local services, while councils in London receive £481 per head.
CCN chairman Paul Carter said: “County authorities have delivered extraordinary savings over the past eight years of austerity, helping to restore the public finances of this country.
“Northamptonshire has not managed austerity well and there is evidence of poor management and decision making. However, this shouldn’t detract from the significant challenges facing all counties.
“Shire counties face a triple whammy of funding reductions, rising demand for services and are the lowest funded type of authority.
“Costs outside of our control and demand for services, such growing elderly populations, mean our councils face funding pressures of £3.2bn over the next two years.
"This is compounded by the fact our councils receive 62% less funding per head compared to London. Counties are shouldering a disproportionate burden and the elastic is close to breaking.
Only a third of county leaders were confident they would be able to set a balanced budget in 2020/21 without additional resources being announced in the Spending Review, said Mr Carter.
The Treasury needed to better understand the pressures local authorities were under and support counties with short-term resources for the next financial year ahead of a longer-term deal, he added.
Sign up to our newsletter to receive all the latest news and updates.