And with a further £350 million poised to be lost from council budgets next year, there are growing fears that a flagship push to cut the schooling gap between rich and poor areas of the country could be undermined.
New analysis from the Scottish Parliament Information Centre shows that funding for local government dropped by more than 10 per cent – about £1.4 billion – since the current SNP government won power five years ago.
Councils and trade unions now fear that a further tranche of cuts planned next year will cost thousands of jobs across the country.
Labour education spokesman Iain Gray said: “We need to cut the gap between the richest and the rest in our classrooms so Scotland has the skills to compete for the jobs of the future, but that won’t happen by cutting the budget for schools.
“These SNP cuts have robbed a generation of young Scots from achieving their potential. We must not allow that to happen again.”
Labour has set out plans to increase income tax by one penny in the pound to raise £450 million and reverse the impact of the cuts, but this was rejected by the SNP government in its recent budget.
Pat Rafferty, Scottish Secretary of the Unite union, said councils are being “starved” of resources.
“It is an industrial scale impact similar to the 1980s,” he said.
“More than 40,000 jobs have been lost with potentially tens of thousands more to come as allocations to local authorities have been consistently cut in real terms.”
Relations between the Scottish Government and town hall leaders have sunk to an all time low in recent weeks after Finance Secretary John Swinney set out the scale of the cuts for 2016/17.
The SNP administration has ruled out a council tax hike to let town hall chiefs raise extra revenues, while demanding teacher numbers be maintained. But it emerged last week that councils are sitting on £1.9 billion of reserves, prompting claims that they have enough cash to protect services.
A Scottish Government spokeswoman said councils agreed to the £10.3 billion 2016/17 funding package.
She added: “Taking into account the addition of the £250m to support the integration of health and social care, the overall reduction in local government funding equates to less than 1 per cent of local government’s total estimated expenditure in 2016-17.
“As autonomous bodies, it is for local government to decide on how they use resources efficiently and deliver services effectively to ensure taxpayers and their electorates get the best possible value.”