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Half of England's councils with social services responsibilities will have to make do with funding increases of 2 per cent or less this year, the Local Government Association has warned.

Its snapshot survey of more than 50 metropolitan, district and county councils found that authorities are having also to provide services for an increasing number of older people.

The report comes as councils raise the threshold for services as the effects of NHS financial problems and the local government finance settlement take hold (see news).

The LGA said eight out of 10 councils consulting on draft budgets were proposing council tax rises from 3 to 5 per cent.

The government has warned that it will cap any authorities that plan to raise council tax by more than 5 per cent.

Local government minister Phil Woolas reiterated the threat this week as he confirmed councils' funding for the next two years.