Councils pursuing a four-day working week are being threatened with financial penalties by the government amid an increasingly bitter row between ministers and town halls over post-pandemic working practices. After announcing a £4bn cash injection to support councils in England amid a worsening crisis for local authorities, the government said it planned to use “financial levers” to stop councils from offering four-day working weeks for staff. Ministers had announced a crackdown on the practice in October in a battle with Liberal Democrat-run South Cambridgeshire district council, which is believed to be the only English authority to have experimented with it so far. However, the development marks a significant escalation after Michael Gove’s levelling up department said it could block councils using a four-day working week from receiving the full amount from future financial settlements. Highlighting South Cambridgeshire’s refusal to end a four-day week trial, which is due to run until the end of March next year, it said: “The government is now inviting views on proposals to use financial levers within future settlements occurring after 2024-25 to stop this practice.” Bridget Smith, the leader of South Cambridgeshire, said: “I was surprised to see this. We know that this government are ideologically opposed to a four-day working week model. “We’re currently submitting 186 pieces of raw data to them every single week in response to their best value notice. They’ve got lots of evidence to show our council is functioning very efficiently indeed.” More than 700 staff, all of the council’s employees, are involved in the trial. Smith said it was improving productivity and residents should not have experienced any negative impact. “Councils are not wasteful. We have had for 10 years to do more and more with less and less,” she said. “It’s very much the 21st-century way, which has been widely adopted in the private sector. If it works there, it needs to have a fair trial in the public sector.” Joe Ryle, the director of the 4 Day Week campaign, said: “These empty threats from Michael Gove need to end and councils should just ignore him. A four-day week with no loss of pay improves both productivity and the wellbeing of workers.” Ministers on Monday announced a funding package worth £64bn in 2024-25 for English councils, an increase of 6.5%, or about £4bn on the amount allocated a year earlier. However, local government leaders said the package fell short of averting a financial crisis as growing numbers of authorities are in effect facing bankruptcy, fuelled by years of austerity-driven cuts, pressure on services, and inflation driving up costs. Shaun Davies, the chair of the Local Government Association, said: “Councils in England continue to face a funding gap of £4bn over the next two years as today’s announcement does not change the funding gap facing councils this year and next.” Simon Hoare, the minister for local government, said: “We are, and will, continue to work alongside councils to ensure quality and reliable services are provided to those who need and use them, while also keeping a weather eye on ensuring value for the taxpayer.”