Council leaders learned of a further 8.5% cut to council tax support – on top of 10% already announced – during a meeting with ministers held yesterday.

Sharon Taylor (Lab), leader of Stevenage BC and chair of the LGA’s finance panel said the 8.5% cut in 2014-15, equivalent to £280m, was revealed during a meeting held on Wednesday with ministers and officials from the Department of Communities & Local Government.

“That is not what we were expecting,” she said. The LGA has received verbal confirmation of the surprise cut since the meeting and intends to lobby against the move, she said, which comes on top of a 10% cut due to be applied in 2013-14.

Cllr Taylor said it had been “made clear” in the meeting that the protection of pensioners from council tax benefit cuts would continue. This would mean cuts of more than 18% for other groups of claimants.

The revelation has led to fears that council tax benefit funding will be phased out following its localisation from central to local government, due to take place in April.

Mehboob Khan (Lab), leader of Kirklees MBC, said: “What’s really concerning is the…implications for council tax allowance in the future.” He told the LGA executive, meeting on Thursday, that sources close to the Treasury had suggested council tax benefit “would not be ring fenced” and was “likely to be reduced each year”.

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