CASH-strapped councils are “raiding their rainy day funds” to cope with growing demand on social services, the public spending watchdog has said.

Government funding for local authorities has fallen by an estimated 50 per cent since April 2011.

The cuts have heaped added pressure on strained finances and forced councils in England to cut back on repairing roads, refuse collections and libraries, according to the National Audit Office (NAO) root-and-branch examination of town hall accounts.

It found authorities’ financial positions have “worsened markedly”, particularly for councils which have social services departments. Several authorities struggled to balance their books and raided their reserve funds – with 66.2 per cent of local authorities with social care responsibilities dipping into their financial reserves in 2016-17.

Dorset County Council said it had not depleted its reserves to fund social care.

The reserves it could access to support care stood at £50.58million at the end of the 2016-17 financial, compared with £50.25m at the end of 2013-14, it said.

But it had drawn on that balance and repaid it during the year.

Borough of Poole also said it had set a balanced budget this year, avoiding the need to draw on reserves.

However, the authority is expected to raise council tax by the permitted maximum of six per cent under the squeeze rising demand for adult social care.

Bournemouth Borough Council had not responded to requests for comment at the time of going to press.

However, in his budget statement last year, council leader Cllr John Beesley said the authority had achieved a balance budget yet had “used reserves as a key financial tool” to “smooth the peaks and troughs of a challenging financial situation”. This was especially true for “demand-led statutory services”.

In 2017-18, the council was getting £51m less in core government funding than in 2010-11, he said.

“In addition, the council has to manage both increasing demand for, and the increasing cost of, council services. Demand is growing for services such as adults’ and children’s social care and homelessness,” he added.

The head of the NAO, Amyas Morse, said: “Current funding for local authorities is characterised by one-off and short-term fixes, many of which come with centrally driven conditions. This restricts the capacity of local authorities and yet the weight of responsibility to respond to increased demand and maintain services remains very much on their shoulders.

“The government risks sleepwalking into a centralised local authority financial system where the scope for local discretion is being slowly eroded.”

From 2010-11 to 2016-17, the estimated number of people aged 65 and over in need of care rose by 14.3 per cent while the number of children being looked after grew by 10.9 per cent.