Police, transport and cash-starved town halls face sweeping cuts as Jeremy Hunt plots a new age of austerity.
The Chancellor is looking at cutting up to £25bn a year after 2025 by reducing public spending growth from 3.7% to as little as 1%.
That could give him nearly half the £54bn savings he wants in next week’s Autumn Statement - and delay them to after a 2024 election.
But Krishan Shah of the Resolution Foundation warned: “It would mean cutting back services like policing, transport and local government – which are already under severe strain – to levels last seen at the peak of the austerity period.”
Mr Hunt and Rishi Sunak are meeting again today to nail down £21bn a year of tax rises and £33bn of spending cuts by 2027/28.
Their plans include a £35bn stealth grab on income tax over six years of freezes, and a possible green light for higher council tax rises.
It comes as a damning survey says three quarters of county councils are likely to cut bus subsidies - which let services run on less popular routes - in a bid to save cash.
Nearly two thirds are likely to turn off some streetlights during the night, says the survey for the County Councils Network.
More than half said they would likely reduce opening hours at libraries or recycling centres - or shut them altogether.
And 72% said it is ‘likely or very likely’ they would tighten eligibility for care homes.
Just 22% told the County Councils Network they are confident of avoiding "financial insolvency" without extra government help.
The CCN said councils are grappling with £3.5bn of extra costs "this year and next" due to inflation and rising demand.
Sam Corcoran, Labour Vice-Chairman of the County Councils Network and Leader of Cheshire East Council, said: “The next two years are shaping up to be some of the most challenging for councils in recent memory.
"After a decade of austerity and with inflation soaring, if the Chancellor does not spare councils from further cuts and provide more funding for local authorities, everything is on the table when considering which vital services to cut."
Multiple reports say the Chancellor is looking at cutting planned public spending growth after 2025 from 3.7%, to between 1% and 2%.
With inflation running higher than that, even having 2% growth would mean “significant spending cuts”, the Resolution Foundation said.
Reducing public spending growth to 1% would save £25bn a year and hitting 2% would save £16bn a year, the think tank added.
But Mr Shah said even those cuts might not be enough to calm the markets - because they’re only pencilled in for after an election.
He said: “Markets will recognise that announcing them is far easier than implementing them.
“The result is that these promised cuts may not convince markets of the government’s fiscal credibility as strongly as they hope.”
It came as experts warned funding for cash-strapped nurseries and childcare is set to fall by 8% in real terms by 2024.
The Institute for Fiscal Studies said while the early years budget is to rise to £3.75bn a year, that will be partially wiped out by inflation.
The funding covers the 15 hours a week of free childcare for all three and four-year-olds - and 30 hours for kids of working parents.
The study, which was funded by the Nuffield Foundation, found that the rising costs for childcare providers will mean that the total funding for the free entitlement will shrink by 8% by 2024-25 compared to 2021-22.
Shadow education secretary Bridget Phillipson said that the IFS's findings "simply reinforce the need for the new, modern childcare system that Labour will build in government".
She said: "The falling value of childcare support means parents will face even higher bills or more nursery closure, all because the Conservatives crashed the economy."
Kevin Courtney, joint general secretary of the National Education Union, said that the findings will come as "no surprise" to those who work in the early years sector.
He added: "The sector is crying out for more funding and support, including fully-funded pay rises which at least keep pace with inflation."
