A new report released by the Local Government Association (LGA) reveals for every pound spent by councils on the arts, their investment is matched four-fold by grant aid and partnerships, and this funding is needed to stimulate local economies.

‘Driving growth through local government investment in the arts' was released on 7 March at the advocacy group’s annual Culture, Tourism and Sport Conference.

The report warns it would be short-sighted for Treasury to further cut council funding, as arts – which deliver £28bn to the economy annually – would be squeezed out of budgets.

The report says local tourism and hospitality are the major beneficiaries of arts funding.

Chair of the LGA's culture, tourism and sport board Flick Rea, said: "A theatre, museum or festival draws visitors who do not simply spend money on their ticket or entrance fee, but also buy meals in local restaurants, go to local shops, or perhaps stay in hotels as part of their visit."

The report said in addition to supporting close to a million jobs and 67,000 businesses, arts funding fills vacant shops and reduces youth offending.