The study by Dr Andrew Jones for thinktank the Local Government Information Unit (LGiU) said that Treasury forecasts state that the UK's benefits bill will top £170 billion in 2010-11, putting already strained public finances under increasing pressure.
Giving councils more control over back-to-work programmes for the unemployed would ease some of this burden, while also tapping into the "local knowledge" that town halls possess about the composition and needs of the workforce in their communities, Dr Jones argued.
He added that centrally-run schemes for tackling joblessness and reducing the number of people on benefits have had only limited success, as in 2009 there were around five million people claiming support for being out of work - only around 500,000 below the peak seen in 1993.
The report states that Whitehall-run initiatives to reverse the upward trend in the number of people claiming these types of benefits that has emerged since the 1970s were halted by the recession.
In addition to acting as a policy analyst for the LGiU, Dr Jones works with the Local Economic Policy Unit based at London South Bank University.
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