The Audit Commission's proposals for comprehensive performance assessment discredit the system, demotivate councils and are virtually impossible to explain or justify, according to Local Government Association chair Sir Jeremy Beecham.
Sir Jeremy (Lab) made his comments as part of the LGA's response to the commission's consultation paper CPA - the next steps.
It continues: 'We have serious concerns about the short-term proposals,' adding that new hurdles and thresholds for councils trying to climb the ranks are 'totally unacceptable'.
It said any movement up the categories would be difficult, while downward movement will be based on increasingly unreliable information.
Sir Jeremy said: 'We have consulted our member authorities closely and they have told us that the Audit Commission's proposals are not adequate. The proposals to raise scoring thresholds from those used last year will mask the true extent of improvement, leaving many councils running to stand still.
'Even though they may have improved significantly since their last inspection, raising the threshold could mean some local authorities not being eligible for the grade they deserve.'
The New Local Government Network also warned in its response this week that assessment is in danger of 'becoming too unwieldy and losing focus'.
Sir Jeremy's comments were backed by Redcar & Cleveland BC chief executive Colin Moore, who said: 'We narrowly missed out last year, but the barrier is constantly being raised beyond our reach. The Audit Commission is making it impossible to make the necessary movement. These changes mean the council's priorities are being distorted.'
The proposals mean councils must prove they have made a 'sign ificant improvement' rather than just making up the missing points.
The commission's strategy and resources director David Prince was keen to stress the proposals are merely part of an ongoing consultation process. He said: 'We have had a wide range of views from local government and many constructive suggestions. We will take them all into account. As ever, our job is to strike the right balance and councils need to be able to demonstrate real improvement in services.'
The NLGN warned of a catch-22 situation when councils try to earn extra freedoms via CPA.
Its response to the consultation says: 'Local authorities' hands are still tied, limiting their effectiveness in the community governance role. This does raise the risk of a catch-22 situation, where to earn further freedoms councils are assessed on their effectiveness at a part of their role that they need the freedoms to fulfil properly.'