Local councils in England are facing a 2.9% cut in overall Government funding for 2014/15, it has been announced.
The figure, announced by local government minister Brandon Lewis in a written statement to the House of Commons, does not include the Greater London Authority.
Mr Lewis said that it should leave councils with "considerable total spending power" of £2,089 per dwelling and give them the stability and certainty needed to plan budgets and "move ahead with transforming local services and ongoing efficiency".
He also announced that Local Government Secretary Eric Pickles and Chancellor George Osborne have agreed measures to allay council concerns that central government support for council tax freezes might be withdrawn on a "cliff edge" basis in future years.
Mr Lewis said: "English local government accounts for £1 of every £4 spent on public services, and is expected to spend some £117 billion in 2013-14. So the settlement that we are proposing recognises the responsibility of local government to find sensible savings and make better use of its resources.
"This settlement marks the second year of business rates retention, and leaves councils with considerable total spending power, with an overall reduction, excluding the Greater London Authority, for next year of just 2.9% We expect the average spending power per dwelling to be some £2,089."
He added: "We have tried to be fair to every part of the country - north and south, rural and urban, metropolitan and shire.
"Of course, it is inevitable that individual local councils will wish to call for more funding for their area. Unlike the old system which encouraged councils to talk down their local areas to win more funding, the decentralisation of local government finance now puts councils in the driving seat: rewarding them for supporting local enterprise, building more homes and backing local jobs."
Explaining the measures being taken to ensure that the council tax freeze does not destabilise local government finances, Mr Lewis said: " From April 2014, funding for 2011/12 and 2013/14 freezes is now in the main local government settlement total for future years.
"I can also announce that the Secretary of State has agreed with the Chancellor that the funding for the next two freeze years will also be built into the spending review baseline. We hope this will give maximum possible certainty for councils that the extra funding for freezing council tax will remain available, and there will not be a 'cliff edge' effect from the freeze grant disappearing in due course.
"We have done our part - we now expect councils to do theirs in helping hard-working people with the cost of living."