NEEDLESS centrally-imposed red tape is costing councils £4.5bn a year which they need to fund vital services, town hall chiefs said today.

The Local Government Association called on ministers to axe the bureaucracy as authorities braced themselves for more recession-enforced belt tightening.

Its research found every household was paying at least £11 a year more than needed on “data burdens”, such as performance indicators.

Streamlining those processes would save £400m, with another £250m slashed from running costs by handing back more responsibilities to councils.

The LGA, which represents more than 350 councils in England, said £1.5bn could be saved by slashing the running costs of seven Whitehall departments which councils deal with.

Central government staff numbers had soared by 21% over the past decade, with permanent staff at Communities and Local Government rising 10% last year alone.

A further £1bn could be found by ending “unnecessary policy activity”, £900m by giving councils more choice over spending, and £430m by cutting the admin bills of quangos.

The LGA said such savings could protect 300,000 school places, 175,000 personal care packages and 36,000 miles of road resurfacing.

Chairman Margaret Eaton said: “Billions of pounds of taxpayers’ money is being spent on needless bureaucracy.

“Things need to be done better and cheaper.

“The recession is forcing everybody who spends taxpayers’ money to think about how they can do more with less. Staying the same is not an option.”