The Convention of Scottish Local Authorities (Cosla) warned there were “no options left” to save money without cutting core services after seeing funding reduced by 4 per cent over the past five years.
Ahead of budget negotiations between parties at Holyrood, the umbrella body for councils is demanding a funding increase of 2.4 per cent above inflation from Finance Secretary Derek Mackay “just to stand still”.
As well as the £549m it says it needs to prevent further erosion of unprotected local services like roads and public safety, Cosla said the Scottish Government had to deliver on a promise of £325m to cover new initiatives like expanding childcare and free personal care.
Councils have lost nearly £1.7bn in real terms since 2011-12, with spending on roads falling by a fifth and 15,000 staff being cut across Scotland. Charges for council services have risen by an average of 7 per cent, Cosla said.
Last week Highland Council warned that it faced a budget black hole of £66.7m over the next three years that would require further cuts to services unless Mr Mackay boosts the local authority grant settlement in December.
In its report, Fair Funding for Essential Services, Cosla states: “There is no room left for manoeuvre. There must be financial support for Local Government in the 2019/20 budget.
“If not, essential services will be at risk resulting in a detrimental impact on our shared ambition of inclusive growth.”
Cosla president Alison Evison said: “Councils have made necessary and significant savings but there are now no options left.
“We cannot be made to cut our essential services without it having a wider, detrimental impact upon our communities.
“We have no capacity to take on additional initiatives, however beneficial the outcomes would be to our communities, unless the financial settlement is increased accordingly.
“I am calling on the Cabinet Secretary for Finance, Economy & Fair Work to make sure this budget invests in local government so that together we can deliver inclusive growth for communities across Scotland.”
Local government funding promises to be one of the battlegrounds of budget negotiations at Holyrood, with Philip Hammond promising a Barnett Formula windfall of £950m for the Scottish Government in last week’s budget.
However, Mr Mackay is already under pressure to pass on a tax cut announced by the Chancellor that will benefit higher earners in the rest of the UK but will leave Scottish taxpayers facing bills up to £1,000 more than south of the Border.
Councils have demanded greater money-raising powers including the removal of the cap on council tax increases.
The Green Party has threatened to vote down the budget unless there are plans to replace council tax, which was frozen by the SNP for nine years before a 3 per cent cap was imposed for the last two.
“Derek’s Budget is going to be bad for local services unless he gives councils more power and makes them less dependent on council tax,” party co-convener Patrick Harvie said at the weekend.
“Abolition can’t be done overnight but we want a time scale. Meantime, we want to broaden the tax base and progress on reforming non-domestic rates.”
Cosla said that after bearing cuts ten times the size of the squeeze on the Scottish Government’s block grant, the uplift from the Chancellor had to be passed on to local government.
Resources spokeswoman Gail MacGregor added: “December’s budget must reflect the essential role of local government in our economy and in our communities.”
Labour said more funding had to be accompanied by greater power for councils, including the right to set a “tourist tax” as proposed by Edinburgh City Council.
Communities spokesman Alex Rowley MSP said: “Our councils are the last line of defence against austerity and need properly funded services to tackle poverty and inequality.
“The Scottish budget cannot continue this conveyor belt of Tory austerity for Scottish local government.
“SNP ministers in Edinburgh passing on these cuts simply harm our communities. These cuts hit our schools and social care, housing and roads.
“Labour wants to see a fair settlement for local government in the budget – an end to the SNP passing on austerity and a renewal of powers for our councils, such as having the ability to set a tourist tax.”
Cosla has also demanded an end to the ring-fence that prevents council from finding savings in areas that account for 58% of their spending. Councils also want a share of any Barnett money that goes towards health, with Cosla arguing that “local government plays a vital role in the health, wellbeing and social care”.
With much of the £950m being passed on by London coming from increases in NHS spending, the Scottish Government has previously said it would direct all windfall money to health.
A Scottish Government spokeswoman said: “Despite continued UK government real terms cuts to Scotland’s resource budget, we have treated local government very fairly.
“In 2018-19, councils will receive funding through the local government finance settlement of £10.7 billion. This will provide a real terms boost in both revenue and capital funding for public services.
“We have made clear that we are open to further dialogue on options for local tax reform.”