This means taxpayers get 19 councillors for every backbench MP, each of whom earns £34,085.
The low level of allowances is in sharp contrast to the media's portrayal last year of 'gravy train councillors' in the wake of the government's decision to allow local authorities greater freedom to determine allowance levels. The average of £1,797 compares with an average £5,000 a year for health authority members.
The LGC survey included all 403 district, county, metropolitan and London borough councils, of which 94% responded.
Last year, allowances paid to England's 25,000 councillors accounted for 0.7% of the £45.5 billion local government budget.
Sir Jeremy Beecham, chair of the Association of Metropolitan Authorities, welcomed the figures: 'They confirm what everyone in all parties in local government knows. Councillors are not in it for the money, they do the work in spite of losing out financially for their public service.'
He believed getting seven council leaders for every backbench MP represented excellent value for money. The survey shows members' allowances increased by 10% between 1994-95 and 1995-96. Payments were deregulated from 1 April 1995.
Metropolitan councils are the highest spenders, with an average per councillor of £3,353 and an average per leader of £9,354.
Districts are the lowest spenders, with £1,425 per councillor and £3,671 per leader.
Among the respondents, the highest paid leader is Dennis Pettitt at Nottinghamshire CC, who gets £16,000 a year. He has spent 34 years in local government, works week days and evenings, up to seven hours on a Saturday and the occasional Sunday. He described his wife as an unpaid secretary.
'There are no holidays, no sick scheme and no pensions,' he said.
The political control of a council makes little difference to what allowances are set. In England, most of the 19 Conservative-controlled councils pay their leaders and members above average, but none appear among the top five highest paying county, metropolitan, district or London borough councils.
The figures collected for the survey cover basic, special responsibility and attendance allowances, but not claims for travel and subsistence.