Giving evidence to the environment select committee's local government inquiry this week, Sir Jeremy said the LGA had taken a 'self-denying ordinance' not to become involved in the funding claims of individual councils.
But Louise Ellman, Labour/ Co-op MP for Liverpool Riverside, asked: 'Is it really credible for the LGA to say it can't represent the interests of local government?'
Sir Jeremy said the LGA could not 'reconcile the competing interests of 400 authorities'.
Ms Ellman asked if the LGA supported the concept of an independent body to determine the distribution of funding to councils. Sir Jeremy said a 'Bank of England solution would be difficult to envisage'.