The uplift in funding, confirmed last month, includes an assumption that councils will receive £1.6bn in additional council tax receipts in 2020-21.

The IFS say this assumes council tax base growth of 1.9% next year, which would “require further significant falls” in council tax support schemes that provide reductions or exemptions for people on low incomes or benefits.

IFS senior research economist David Philips told LGC that council tax support reduced the council tax base by 13.9% in 2013-14, when councils were given the responsibility for delivering their own safety nets. However, the reduction in the tax base caused by support schemes fell to 9.9% this year.

Mr Phillips said this lessening impact has been driven partly by reductions in the number of people claiming support and is probably also linked to rising employment and richer and younger pensioners replacing poorer and older pensioners.

“But some [of the reductions] also reflect the fact that the generosity of schemes has been cut because councils have mimicked national benefits policy, like the benefits freeze, and have increased minimum payments and cut back maximum support levels,” he added.

These factors have reduced the generosity of council tax support by about 12% since 2009-10, Mr Phillips said, while about half of the overall increase in council tax bases in 2018-19 and this year were due to councils cutting the cost of council tax support schemes.

The council tax base has increased by 1.6% over the last two years, according to Ministry for Housing, Communities & Local Government figures.

“[The ministry’s] figures for 2020-21 assume this will continue at more or less the same rate,” Mr Phillips said. “But that might not happen if, for example, employment does not continue to rise, or councils stop cutting generosity [of support schemes].”

The ministry has been approached for comment.