Budget reductions mean “starker choices ahead” for local councils which will not be met “simply by continuing to cut staff and services,” a new report from the Accounts Commission said.
The claim came after council leaders were locked in a bitter dispute with the Scottish Government over the budget passed for 2016-17, which included swingeing reductions in spending.
However, the Accounts Commission annual overview of local government set out a 5 per cent drop in revenue funding for authorities in the next financial year, bringing a total “real terms” fall of 11 per cent since 2010-11.
The authors of the report said that councils “have been effective in balancing their budgets” to deal with the sharp fall in funding available for services, but warned that they face “increasingly difficult decisions to continue making ends meet”.
In a stark warning to authorities that they may have to reconsider the way services are provided, the commission found that Scotland’s local councils faced an overall predicted funding gap of just over £228m next year.
Setting out the scale of future cuts likely to hit services, the report stated that councils would have to “go beyond cost-saving measures to existing services and to fundamentally rethink their models of service delivery”.
Douglas Sinclair, chair of the Accounts Commission, said: “Councils have coped well so far but the scale of the future challenge requires longer-term planning and a greater openness to considering alternative forms of service delivery.”
The Convention of Scottish Local Authorities said councils were “faced with increasing central direction over how they deliver services which focus on inputs, rather than outcomes for our communities”.
However, a Scottish Government spokesman, who disputed the findings, said: “The actual figures, taking into account the addition of the £250m to support the integration of health and social care, show that next year’s reduction in local authority overall estimated expenditure is less than 1 per cent – and that does not take account of the additional money that we are investing in educational attainment over and above councils’ core school budgets.”