Communities secretary Eric Pickles has announced an average 1.8% cut to council finances under the provisional 2015/16 local government settlement.
This puts highways and transport once again in the firing line for cuts as experts agree maintenance and discretionary services are always the first to be reduced.
Howard Robinson, chief executive of the Road Surface Treatments Association (RSTA) said: 'This could see unprotected road maintenance budgets being used to fund other council services. The result will be further deterioration and more potholes in the local road network.
'It is ironic that the government has recently made a big splash about its £15bn investment in the strategic road network, which represents just 2% of our road network. Yet the 98% of local roads, without which you could not access the motorways and trunk roads, continued to face a maintenance funding crisis.'
The news also comes after a recent National Audit Office report that shows local government transport, highways and infrastructure services have suffered some of the most extensive cuts over this parliament - losing almost half their budget in some areas - under a trend that may not be sustainable, auditors have warned.
Mr Pickles told parliament the council tax referendum threshold – the level at which councils can raise council tax without incurring the need for a local referendum – will remain at 2%.
Local government minister Mr Hopkins said: 'We have been working to give hard-working people greater financial security by taking action to keep council tax down. There is extra money on the table for all councils which pledge to freeze council tax bills next year and we would urge them to take it to help their residents with the cost of living.
'The local government settlement is fair to all parts of the country – north and south, rural and urban, city and shire – therefore every council should be able to deliver sensible savings while protecting frontline services for local taxpayers.'
Ministers said the actual drop in spending power was 1.6%, when grants for sector-led improvement were taken into account.
In response Local Government Association (LGA) warned savings of £2.6bn were needed from council budgets for 2015/16, as the cut announced today brings the total reduction in core government funding to councils since 2010 to 40%.
LGA chair Cllr David Sparks said residents had paid the price of funding reductions through roads deteriorating and other services closing.
‘Councils have spent the past four years finding billions of pounds worth of savings, while working hard to protect the services upon which people rely. But those same efficiency savings cannot be made again. The savings of more than £2.5bn councils need to find before April will be the most difficult yet.
‘If the services which underpin people's daily lives are to survive the next few years then it will be essential that this and the next government commit to a much faster and bolder approach to English devolution.’