The UK's population is currently measured using the census
The national census is out of date, too costly and should be scrapped immediately, a think tank has claimed.
The 10-yearly population survey becomes out of date as soon as it is published and is likely to cost £500m in 2011, the New Local Government Network says.
Its report backs a "local head count" based on GP surgeries, school places, electoral registers and tax records.
Councils have argued they are not getting enough funding because official population estimates are wrong.
The next census is due to be carried out in 2011 but the report says preparations should be discontinued "immediately" and the count carried out instead through "administrative data sources".
A proposed fourth page of questions for the next census will boost its cost by £25m, taking the overall estimated cost to £500m, the report says. It questions "whether this is the best use of public money".
It says there have been a number of "high profile miscalculations" of local populations - including Slough which was informed its population was decreasing at a time of significant immigration.
Information based on a local head count would be more accurate and would cost at least £250m less to carry out, the report says.
Chris Leslie, of the NLGN, said: "The census has been around for 200 years and it is no longer gathering the right sort of data for modern public services.
"We are left in a situation where not only does central government not know where it should distribute public money but local councils do not have the information or flexibility to work out where best to spend money to tackle worklessness and crime, or to gauge where future demand will be for care homes and schools."
Shadow communities and local government secretary Eric Pickles said there was growing public concern over "the increasingly intrusive questions that the government is planning for the next census".
He added: "Many councils have been short-changed in government funding because the last census failed to record properly the real number of local residents.
"High levels of inward migration have compounded the problems, with Labour ministers having little clue on the real sizes of populations in many parts of the country."
The census is carried out across the UK but the report has focused on England and Wales - where the Office for National Statistics has responsibility for it.
Every household is legally obliged to give details of who is living in their house on the day of the survey, which takes place once every 10 years.
But there have been concerns that it is no longer up to the job of providing reliable data on which to base important public spending decisions.
The ONS is looking at other methods of counting the population, such as a compulsory register of addresses.
But an ONS spokeswoman said the census "currently remains the only effective way of collecting the detailed information needed".
She said alternative sources had "known weaknesses including gaps, double counting and a significant time lag".
"The census gives us national population estimates as well as detailed information for small areas - down to areas covering just 100 households," the spokeswoman added.
A spokesman for the Department for Communities and Local Government said funding was worked out from "a variety of sources" using the "best and most robust data available".
He added: "Councils already have the security and stability of the first ever three-year financial settlement with every council receiving an increase in core funding every year for the next three which they are free to spend as they see fit to meet local needs and priorities."
In May, MPs on the Treasury select committee said the 2011 census should be the last where population is counted through the collection of census forms.