Extra funding should go to areas with rapid population growth to help the NHS and other services meet rising demand, the Local Government Association has warned.
A report published today says public services in some parts of the country lack resources to deal with a significant influx of migrants.
It says the NHS, especially GPs and accident and emergency services, are coming under pressure and need extra cash.
The report warns that migrants are often making 'inappropriate use of A&E instead of GPs' and are also contributing to the rising numbers using maternity services at a late stage, which 'makes planning difficult' for the NHS.
It also calls for more funding for mental health services, found to be increasingly used by traumatised asylum seekers and refugees.
Other services feeling the strain of an expanding population include housing, translation and interpretation services and children's services and education.
LGA chair Sir Simon Milton said that although migration was benefiting the UK, not enough money was being directed back into the provision of services for migrants.
'The problem is that the money that is being generated isn't finding its way back down to the local level.'
He added: 'No-one has a real grasp of where migrants are settling, so much-needed funding for local services isn't getting to the right places.'
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