Councils pursuing a four-day working week are “on notice” and should “cease immediately”, the Government has said.

The Department for Levelling Up, Housing and Communities (DLUHC) is exploring measures to “ensure that the sector is clear” that the practice should not be adopted, according to newly published guidance.

Ministers say the working arrangement does not deliver value for money for local taxpayers.

The guidance, which is non-statutory, was released on Thursday following a row earlier this year over a local authority’s trial of offering employees a three-day weekend in exchange for longer shifts.

In September, Liberal Democrat-run South Cambridgeshire District Council announced it was continuing with a planned extension of the pilot until next March, despite ministers previously ordering officials to end it.

It was the first local authority in the UK to undertake such a trial.

Introducing the guidance on Thursday, local government minister Lee Rowley said: “In normal circumstances, the Government of course respects the right of councils to make their own decisions on key issues. There are also times, however, when Government deems it proportionate to step in to ensure that residents’ value for money is protected. The issue of the four-day working week is one of those times.”

He added: “Those councils who continue to disregard this guidance are now on notice that the Government will take necessary steps in the coming months ahead to ensure that this practice is ended within local government.”

If councils defy the guidance and there is evidence of service decline, the Government says “departments may raise concerns directly with the authority, monitor performance more closely and consider options to correct declining performance”.

South Cambridgeshire District Council is continuing with its trial despite the guidance, saying there is strong evidence it is helping with recruitment and retention.

Since January, sickness rates have fallen by a third and complaints about services involved in the pilot have reduced, the authority said.

Council leader Bridget Smith said: “On one hand, Government tells us to innovate to cut costs and provide higher quality services; on the other they tell us not to innovate to deliver services.

“We are best-placed to make these decisions in our area, which has high private sector wages and housing costs, making it very difficult to attract and retain talented staff we need to deliver for residents and businesses.”