Unfair funding cuts which hit poorest areas hardest would come to an end under Labour - but councils would still be forced to make savings, shadow ministers have warned.
Speaking to The Journal, shadow local government minister Andy Sawford said Labour would draw up a new funding formula to ensure towns and cities across the North East were no longer targeted for funding cuts.
It follows warnings from the region’s MPs and council leaders that vital services such as social care, policing and fire brigades are suffering because the region is losing money while wealthy areas in the south are actually gaining cash.
But Mr Sawford also warned that a Labour Government could only change the way funding was distributed and could not promise an overall increase in local authority funding.
He also revealed that failing private firms running the Work Programme, a Government scheme to provide unemployed people with training and advice about getting a job, faced the sack when their contracts run out in 2016.
Their role could be handed to voluntary organisations or to the public sector, he said.
The Association of North East Councils has warned that cuts in council budgets in the North East amounted to £467 for every household between 2010 and 2016 - compared to just £105 in the South East.
Mr Sawford, also shadow minister for the cities, said: “The commitment we have made is that we are going to review the formula to ensure that local authority grants are based on a proper needs assessment.
“We’ll then get into how we do that at a time where we are not able to reverse the cuts. It’s not going to be possible.
“So it will be a financially tight time for all local authorities around the country.”
One authority has warned it is concerned about the effect of Septembers Scottish independence referendum on its finances.
Sunderland City Council said councils in the North East already faced “an un-level playing field” because Scotland was able to raise its own funds and control much of its own spending.
And Scotland was likely to gain even more autonomy even if voters rejected independence.
In a submission to the Local Government Select Committee, Sunderland called for local authorities to have more independence.
The council said: “It is Sunderland City Council’s consideration that without greater fiscal devolution to and beyond cities and City Regions areas like Sunderland are at risk of being caught between ‘a rock and a hard place’, between an increasing autonomous and confident Scotland and an increasingly prosperous and powerful London and the South East.”