Dirty Streets and Treatment Cuts. U.K. Councils Confront Budget Crisis.

LONDON — Streets littered with potholes and garbage. Alcohol and drug treatment centers shut down. Vulnerable adults and children left without care.

That is the grim picture of Britain’s future painted by the County Councils Network, which warned on Thursday that local councils will be forced to slash more than $1 billion from their budgets next year in cuts that will likely result in services being whittled to the bone.

Councils are Britain’s fundamental unit of local government, dealing with an array of basic needs: trash collection, public transport, libraries, town planning, caring for people in need, among other things. They levy a tax on homes and charge fees for some services. They also collect a nationally set tax on commercial real estate, and keep an increasing share of it.

But they are struggling to make ends meet, mainly because of a sharp reduction over the past decade in the central government funding that makes up a large portion of their income, at a time when a rising elderly population has strained local finances. At the same time, years of government-mandated caps on tax increases have made it hard for local authorities to replenish their coffers, forcing them instead to cut services.

This year, the local Conservative-run government in Northamptonshire filed for a de facto bankruptcy twice, even when selling off assets and outsourcing services failed to make the savings required to balance its books. Other counties, like East Sussex, Somerset and Surrey, are also warning that they may be able to provide only those services required by law.

The dire financial situation risks creating “a sort of a world of increasingly private affluence with public squalor,” said Tony Travers, a professor of government at the London School of Economics. “There are more people living in the streets, streets are cleaned less frequently. It’s a slow, slow, slow retreat of basic, clean and safe local public services, which were the origins of local government.”

The County Councils Network, a cross-party organization that represents England’s biggest local authorities, said its members planned to cut $1.2 billion next February to balance their budgets. This year, it said, England’s 36 county authorities made savings worth $933 million.

A separate survey of county leaders, conducted by the same organization, showed that 2 out of 5 respondents said public health services like those for sexual health and substance abuse were likely to be sharply reduced or even eliminated entirely over the next three years. More than a third indicated they expected to slash children’s services, and nearly a sixth of council leaders said they expected to sharply restrict services like repairing streetlights, picking up garbage and filling potholes.

“County authorities are in a serious and extremely challenging financial position,” said Nick Rushton, the Conservative leader of the Leicestershire County Council, who was criticized this year for trying to make his local government smaller by removing officials and layers of bureaucracy.

“There is not enough money today to run vital services,” he said, adding that his county was facing a $53 million hole in its budget next year because of a growing demand for services, rising inflation and continued cuts in government grants. “The government needs to intervene if we are going to avoid unpalatable cutbacks next year.”

Funding from London for local governments has fallen 60 percent since 2010, with reductions expected to total $21 billion by 2020, the Local Government Association has calculated. In response, nearly every council in Britain has cut or outsourced services, sold off assets and tried a host of budget gimmicks.

The cutback in central government funding has roots in the austerity policies and cost cutting that the Conservative-led national government imposed a decade ago in response to the global financial crisis. The Tories in London argued that austerity was the responsible solution to balance public accounts and encourage future growth.

The government at the time inherited a deficit worth about 10 percent of Britain’s gross domestic product. It pledged, but failed, to get the deficit down to zero percent by 2015. Currently, the deficit is about 3 percent of GDP, and the government now says it will not eliminate it until the mid-2020s.

Last year, the government gave councils some money for services to look after fragile adults. Still, 1 in 10 of the larger councils that have obligations to care for children and elderly people are in danger of exhausting their reserves within the next three years, according to the National Audit Office.

“Britain faces a stark choice, between a European model of higher taxes and big levels of public service, or it has to concede that the government may no longer provide some services,” said Travers of the London School of Economics.

“But national politicians in Britain are unwilling to do either,” he added. “What they’re offering, really, is French or Swedish-style public services but with American-level taxes, and you can’t sustain that for very long.”