Councils have been told to "get a grip" on pay after new figures showed more than 28,000 local government staff earn at least £50,000 a year.
The TaxPayers' Alliance (TPA), which campaigns for lower taxes, said this cost almost £1.9bn in 2012.
Local government minister Brandon Lewis said many councils are failing to make "sensible savings" which would allow them to protect services or fund a council tax freeze.
However, councils insisted their pay figures compared favourably with other sectors and stressed the need for "good managers".
The TPA said 28,754 employees at councils were paid more than £50,000 figure, down 3,991 on the previous year - a saving of £279m.
But the group claimed the fall was partly due to the large number of redundancy payments made in 2010/11, which temporarily increased remuneration bills.
Local Government Minister Brandon Lewis said the findings showed local authorities still had "massive scope" to cut costs to protect frontline services.
"For too long the senior local government pay bill has spiralled up and up and taxpayers have been left footing the bill," he said.
"Whilst I commend those councils taking action, there are still many others failing to get a grip on costs.
"This report exposes the fact that town halls still have massive scope to make sensible savings to protect important frontline services and freeze council tax."
TPA chief executive Matthew Sinclair said: "Taxpayers are still paying far too much for bloated bureaucracies that have been established in too many town halls over the last decade."
"Councillors need to insist that their local authority does more to find savings and cut back on staff costs that residents cannot afford."
The Local Government Association, which represents councils, said the fall in the pay bill was "good news" and defended the current level.
"Middle and senior managers make up around 1% of the total local government workforce, which compares favourably with practices elsewhere in the public and private sectors," a spokesman said.
"Councils provide more than 700 local services, from fixing the roads and collecting the bins to caring for the elderly and safeguarding children. We need good managers to make sure those jobs are done well."
The LGA also challenged the claim that the fall was due to the number of redundancy payments in 2010/11, arguing that redundancy costs were probably higher in 2011/12.
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