Analysis by the Local Government Association (LGA) has found that local authorities in England and Wales will have to find more than £1 billion by 2020 to pay for the new national living wage, the FT has reported.

This will have to occur in unison with further funding cuts expected in the spending review later in 2015 – the LGA suspects that councils in England may have to face a £3.3 billion reduction in central government funding by 2017.

Gary Porter, chairman of the LGA, called for the government to step up its funding: “If government were to fully fund the cost of introducing the national living wage to council staff and care workers, councils could avoid extra financial pressures being placed on them as they continue to protect services, such as caring for the elderly, collecting bins and filling potholes.”

For weekly news updates, subscribe to our email newsletter.

Related: Giant outsourcing suppliers welcome minimum wage rise due to contract provision