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Thousands of public sector workers in Lincolnshire are taking part in the second day of a 48-hour strike.
More than 20 schools in the county are closed and other services, including libraries and refuse collection are expected to be affected.
Three unions have called the action in protest over pay, saying a 2.45% offer does not keep up with inflation.
But local authorities have told the unions there is no more money to give out in wage rises.
Jobs threat
Robert Frost, a steward for Unison in East Lindsey, insisted all they wanted was a fair deal: "Unison's claim was for 6%, which is 50p an hour. That 6% represents just a standstill for this year because part of that claim is to catch up for a below inflation rise that was given last year."
The unions - which include Unison, Unite and the Public and Commercial Services Union - claim local authorities have huge reserves which they could use to increase the pay offer.
Deputy Chief Executive of the Local Government Association John Ransford disagrees: "No there is no money in the bank for pay.
"Reserves are kept for all sorts of purposes but that money can only be used once and we have gone to the limit of our affordability, every penny we can possibly put into pay we have done.
"If we go any further that means less services for people and less jobs for the workers."
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