The failure of the Government's Comprehensive Spending Review to provide efficient extra funding for local government could lead to further strike action by council workers, the sector's HR body Socpo fears.
Last week Chancellor Gordon Brown announced a rise in spending on public services from £240bn this year to £301bn by 2005-06.
Local government faired badly, with the majority of money going to the NHS, education and transport. The CSR also included plans to introduce league tables and financial penalties for councils that fail to meet targets.
Last Wednesday around 750,000 council workers went on strike over the employers' 3 per cent annual pay offer.
Socpo is concerned that the Government's increased investment in other areas of the public sector will anger local government unions and lead to a series of long and damaging strikes by council workers.
Francesca Okosi, president of Socpo, believes the sector needs more money and support from the Government if it is to help achieve Tony Blair's main aim of improving public services.
She said: "I am disappointed with the CSR announcement. It does not address the areas where we are struggling.
"Local government is bigger than just education, it helps bring communities together.
"Local government is not seen as a 'sexy' sector. There are problems with teaching, but there are other problems elsewhere, such as social services," she added.