"It is hard enough for Councils to make the much need savings, savings that should reduce the burden on local council tax payers, without having one hand tied behind their back.
"We think that to get the best service, Councils should be able to source them locally. This reduces costs and creates local employment, but EU rules mean that that is nigh on impossible."
Cllr Peter Fleming, Chairman of the LGA's Improvement Board, said: "Ridiculous EU procurement rules are making it harder for councils to save money by sharing services, and opportunities to promote local jobs and economic growth are being missed. Opaque internal market regulations, which fail to distinguish public sector goals from the private sector's profit motive, are standing in the way of councils delivering better value for money to taxpayers.
"We desperately need the Government to take the fight to Brussels on our behalf and promote a re-write of the rules which are stifling public service innovation and limiting councils' ability to promote growth in their area."