Coronavirus has left a £500m black hole in the capitals’ finances, the Mayor of London has revealed.
Sadiq Khan has warned services, including the police and fire brigade, will need to be cut back without a government bailout.
Local authorities across the country face a shortfall of business rate and council tax income caused by the impact of Covid-19, he said.
The mayor will cut his own pay by 10% and freeze pay for his senior staff.
The government is “punishing” Londoners with a “new era of austerity”, Mr Khan said.
“Unless ministers act, the current number of police officers will need to be reduced,” he said.
“It will be impossible to tackle youth violence or make the changes to the London Fire Brigade that are desperately needed after the awful Grenfell Tower tragedy.”
Mr Khan previously announced he would not receive any pension contributions from the Greater London Authority (GLA), which he said was “saving taxpayers 11%”.
The Met Police, London Fire Brigade, Transport for London (TfL) and the GLA have a combined budget deficit of £493m over the next two years.
The hole is due to a forecast reductions in tax receipts from firms paying business rates and householders not able to keep up with council tax bills.
Services will be asked to look for significant savings, and report back by the end of November.
Mr Khan warned that failure to act by the government would jeopardise Prime Minister Boris Johnson’s campaign commitment to recruit 20,000 extra police officers.
Last month, TfL received a £1.6bn bailout to keep services running.
The lockdown has led to a 95% cut in people using the Tube compared to this time last year.
The Department for Housing, Communities and Local Government has been approached for a comment.