The Office for Budget Responsibility has revised its estimate of how much councils will have to spend on services up to 2024 upwards by £10bn.
The independent body responsible for providing analysis on public finances increased its forecast for locally-financed current expenditure in its latest Economic and Fiscal Outlook document, released alongside the Spring Statement.
The document presents a healthier overall picture for councils than the last version of the outlook published in October.
Since the last report, the OBR has increased its estimate of business rates income by an average of £400m a year.
Council tax receipts have been revised up by £600m a year over the six year period from 2018/19.
The report said: “We have not changed our view on the extent to which local authorities will spend less than their income in 2018-19, thereby adding to reserves.
“But we have revised up use of reserves in 2019-20 by £1.2 billion.”
