West Yorkshire councils have been told to slash jobs before they axe front-line services as the government cuts grants by almost a fifth over two years.
Leeds council will see the annual amount it receives from Whitehall shrink from 413m this year to 337.6m in 2012/12 – a cut of 18.4 per cent.
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Wakefield faces a cut of 17.7 per cent as its government grants fall from 188.2m to 154.8 over the same period.
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Speaking to the YEP, cabinet minister Eric Pickles accused councils of
not doing enough to cut costs - including their staff numbers.
He said: "I would like to see them sharing chief executives, I would like to see them sharing their legal department, their accounts department, their payroll, their IT, their planning, their education support functions. And when they have done all that, if they feel they have to close libraries then they should come and talk to me again."
The detail of council grants for next year and 2012/13 is the first time the government has revealed the full impact its drive to reduce the deficit will have on local areas.
Mr Pickles told MPs he was attempting to protect vulnerable local authorities which are heavily reliant on money from Whitehall.
Figures published by his department showed that the "total spending power" of Leeds council is only due to fall by 4.71 per cent in 2011/12 and 3.84 per cent in 2012/13.
However, these statistics include the amount of money the councils collect each year in council tax.
They also include the 1.2bn councils will receive over two years in funding from the Department of Health.
Coun Keith Wakefield, the leader of Labour Leeds council, accused the government of "creating a massive smoke screen" and Baroness Margaret Eaton, chairman of the Local Government Association, said: "This is the toughest local government finance settlement in living memory. A few councils have seen a reduction of up to 17 per cent in the first year."