The view was expressed by the associations representing county, district and metropolitan councils in England giving evidence to the Commons environment committee's inquiry into SSAs.
AMA Chairman, Jeremy Beecham said, the principle of capping was opposed because it distorted democracy. A more locally based tax is needed with greater accountability in return, he said.
But the committee argued that if capping was scrapped there would be a return to the 1980's with big spending by a few 'rogue' authorities and leaving people with no protection.
Overall, the associations, the ACC, ADC and AMA, said they were satisfied with this year's SSA review, with several authorities doing 'strikingly well'. However the three put forward a 'shopping list' of proposals for change.
The use of updated census information in assessing SSAa was helpful, said Mr Beecham, but using 1991 as an expenditure base was not. He pointed out that at the height of capping in 1991 some authorities spending was held down but uncapped authorities actually increased their expenditure.
Retaining the benefits of the census results this year, would require updating figures more than every ten years, added ADC chairman, Margaret Singh.
The associations pointed to several flaws in SSAs. Jeremy Beecham singled out problems relating to Additional Education Needs spending, personal social services and capital finance. AEN spending was based on questionable basic assumptions, for example, said Mr Beecham, ethnic origin of school pupils was used as a indicator of need but Asian children do not necessarily need additional spending, he claimed.
Capital finance was based on a snapshot position of capital debt over a number of years, Mr Beecham said, but was not regarded as significant in SSAs. For example, Newham LBC was continually criticised for not spending enough on education but has to deal with large capital debts but received no extra SSA.