The Prime Minister claimed spending power for councils has gone up during a visit to Kingston and Richmond’s children services despite the boroughs being forced to slash up to 25 per cent from the budget by 2018.

David Cameron made the comments during a visit to Achieving for Children (AfC), which recently announced it had overspent by £1.5m in its first year.

Community interest company AfC also faces having to make £4m worth of cuts from its £107m budget over the next two years.

Mr Cameron said: "Across all local councils, we have asked them to be efficient and to do more for less and that is what they have done.

"Satisfaction rates with council have gone up.

"What one reads is very overdone, they have got extra money."

The Tory PM was paying a visit to Twickenham based department where children's services merged with Kingston after they were deemed inadequate in 2012.

He discussed with social workers plans to have failing children's services, like Kingston’s, taken over by other councils or charities.

Despite the huge overspend and looming budget cuts, councillors said they were "impressed" with AfC’s performance during Kingston Council’s adult and children’s committee in November and AfC was given a ‘good’ rating earlier this year.

Conservative Kingston councillor Julie Pickering said: "AfC are in a tough position, but so is everyone.

"We have to make a 40 per cent cut in services across the board.

"As much as [AfC] are trying to make savings the amount we need to spend is rising.

It is tough for everyone at the moment."

Deputy leader of Richmond Council Geoffrey Samuel said although Mr Cameron was correct that spending power was up, it was a "perverse measure" of economics.

He said: "Spending power is how much you collect from council tax and government grants, and the higher the tax, the lower the grants.

"His statement is correct but it penalises those with high council tax."

Under new reforms, future failing services will be told to improve within six months or be taken over by higher-performing authorities.

Mr Cameron also announced £100m in funding to attract high-calibre graduates to choose social work.

He said: "Children’s services support the most vulnerable children in our society.

"They are in our care; we, the state, are their parents; and we are failing them.

"It is our duty to put this right; to say poorly performing local authorities: improve, or be taken over."

Kingston Council leader Kevin Davis said: "The partnership is a true example of how local councils can work together to develop innovative and radical programmes to streamline management, increase the resilience in front line services all the while bringing about out significant savings and efficiencies."