Seven in ten councils are questioning whether devolution proposals go far enough to move spending powers from central to local government.
Last October the Chancellor signed an agreement to give more powers to the Tees Valley and the North East.
Research found that six out of ten councils in the UK are confident that they can become financially self-sufficient by 2020 but only if they are given more powers.
Councils want increased powers over charging and trading, the ability to reband council tax and raise specific local taxes.
As councils finalise their 2016/17 budgets, nearly 90 per cent say they will have to increase charging for services while a further 82 per cent say they will be forced to dip into reserves to balance the books.
Jonathan Carr-West, Chief Executive of LGiU (Local Government Information Unit), said:
Local government finance is a mess. Our research shows that right now councils are cobbling together their finances by using reserves and increasing charging wherever they can.
Earlier, a spokesperson for the Department for Communities and local Government said that they are committed to helping local government become self-sufficient.
We share the committee’s ambitions for even greater transfer of powers from Westminster to local areas and local people, and welcome their support for our devolution revolution.