That warning has come from the parliamentary committee that monitors the Office of the Deputy Minister, in a scrutiny of the ODPM annual report.
MPs said the savings, required following the Gershon efficiency review, 'may be difficult to achieve, given that more and more aspects of local government expenditure are determined by central government'.
Only greater budgetary freedoms and flexibilities would enable councils to make the savings, the MPs said.
The ODPM is to find£622m savings on administration by 2007-08, but the committee said: 'We are concerned by the ODPM's inability to tell us where the 10% reduction in staff posts will occur.
'It has produced this figure before it has worked out how it can be achieved.'