Councils will struggle to cope with the Federal Government freeze on indexation of local government grants.

Councils are being asked to do the same with less, while still trying to meet ratepayers’ expectations.

Federal Minister for Infrastructure and Regional Development Warren Truss has blamed the former Labor government for forcing the current government to implement the freeze.

But he denies any overall loss of funding to councils.

Nationwide, authorities say the indexation freeze is effectively $926.4 million cut from 2014-15 to the start of the 2017-18 financial year.

Minister Truss’ says the freeze “is more than offset” by other funding from the federal government, including: $500 million - Road Black Spots, $2.1 billion - Roads to Recovery including a double $350 million - payment in 2015/16, $300 million - Bridges Renewal, $200 million - Heavy Vehicle Safety and Productivity, $300 million - Community Development Grants and $1 billion National Stronger Regions Fund.

These allocations total about $4.1 billion, and if they were divided by Australia’s 536 councils, it would come to about $7.2 million for each council.

But this is not how funding is allocated.

Councils’ grants go up and down from year to year, and Mr Truss says they must adjust their budgets irrespective of the indexation pause to account for the fluctuations.

Australian Local Government Association president Mayor Troy Pickard said that the grants often made up the majority of revenue for many smaller councils, so any loss will hit hard.

He said freezing the indexation meant councils had access to less “untied” or not specifically allocated funding.

Tasmania’s local governments will be among the hardest hit, and the state’s Local Government Minister Peter Gutwein spoke this week on the issue.

“Just like the state government, local governments were blind-sided by the last federal budget,” he said.

“It is disappointing that Financial Assistance Grant growth was unilaterally cut by the federal government.

“The state government is committed to working with local governments to ensure they can sustainably deliver the services that Tasmanians deserve.”