Releasing a fifth of the VAT budget raised from sugary foods to local councils would create around £1 billion of extra funding, the Local Government Association said.
We are talking about an epidemic
This slice of existing money would enable local authorities to do so much more to reverse the tide of obesity which threatens to make the next generation the first to live shorter lives than their parents.
Councils are doing everything they can to curb obesity at a local level. This extra money would enable them to ramp up their efforts and really make a major impact on tackling this condition.
Additional resources would enable local councils to respond to the specific health and social care needs of their communities in ways that they know will be effective.
The LGA's report 'Investing in our nation's future' sets out what powers it believes the next government should devolve to councils in the first few months following May's general election
The Local Government Association has insisted that councils do not have enough money in their public health budgets to properly cope with the obesity crisis once mandatory services such as sexual health, which accounts for a quarter of the budget, and drug and alcohol services, which accounts for nearly a third, have been paid for.
Health problems associated with being overweight or obese cost the country £5 billion per year, with more than 60% of adults and more than a quarter of children overweight or obese, according to research by the Department of Health.
Local government leaders argue investing in prevention at a local level is vital to ensure its residents are healthy and to save the country money in the long run.
Local authorities have warned they cannot afford to tackle the growing obesity "epidemic" in England Wales unless the next government releases £1 billion for local investment.
A report published by the Local Government Association (LGA) is calling for a fifth of VAT raised on unhealthy foods such as sweets, crisps, takeaways and sugary drinks to go back to councils to fund free leisure activities and health awareness campaigns.
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The authors of a report into obesity have called called for a "coordinated response" from governments, retailers, restaurants and food and drink manufacturers to address the "global obesity crisis".
A series of 44 interventions could bring 20% of overweight or obese people in UK back to normal weight within five to 10 years, the report said. This would save around #16 billion a year in UK, including an annual saving of about £766 million in the NHS, according to the study.
Obesity is a major global economic problem caused by a multitude of factors. Today obesity is jostling with armed conflict and smoking in terms of having the greatest human-generated global economic impact. The global economic impact of obesity is increasing. The evidence suggests that the economic and societal impact of obesity is deep and lasting.
The report found the economic impact from smoking in the UK was £57 billion in 2012, or 3.6% of GDP, while the country suffered a £43 billion annual loss from armed violence, war and terrorism or 2.5% of GDP.
A report has found that obesity is a greater burden on the UK's economy than armed violence, war and terrorism, costing the country nearly £47 billion a year.
The study, commissioned by consultancy firm McKinsey and Company, revealed obesity has the second-largest economic impact on the UK behind smoking, generating an annual loss equivalent to 3% of GDP.
An 18-year-old has described how miserable her life was before she had a gastric band fitted so she could undergo a dramatic weight loss to get her health under control.
Sadie Roberts told Good Morning Britain she was depressed, weighed 24 stone and at risk of diabetes before she had the drastic operation.
However, she defended her decision to have the surgery after it emerged "hundreds" of under-25s were undergoing similar procedures every year in the UK.