Spending by town halls on tackling problems such as potholes on the nation’s roads fell from £691m in 2010/11 to £554m last year, it said.
The research suggests that spending on education, child protection and social care has been protected at the expense of other services such as roads, culture and leisure services.
The findings are contained in the Local Government Benchmarking Framework, which has been reporting on how much is being spent by councils on services every year since 2010/11.
It shows that unprotected services have endured significant cuts, with spending on roads falling by 20 per cent, planning by 33 per cent and culture and leisure services by 17 per cent.
Council umbrella body Cosla said the figures showed that cuts to budgets “have really started to bite” but that local authorities were adapting well to the changes.
The report said total funding for Scottish councils had been cut by 7.6 per cent in real terms since 2010/11, falling from £10.5bn to £9.7bn.
Despite the sharp fall in road funding over the past seven years, spending by councils has actually increased by 1.6 per cent in the past year as they tackle maintenance backlogs.
Research published in October suggested that there are more potholes in Scottish roads than in any other part of the UK, stretching to a combined depth of almost four miles.
A total of 154,310 potholes were reported to Scottish councils in 2016, around 16,000 more than the next worst region, the South West of England, the study by an insurance firm found.
Last week, residents in the Highlands raised concerns about a deterioration in the road surface of the A82, claiming it would “only be a matter of time” before it caused a serious accident.
Road management firm Bear Scotland blamed wintry weather for the potholes on the nation’s second longest A-road, which have left several drivers with burst tyres and broken suspension.
Cosla president Alison Evison said the cuts to local road budgets “will not have gone unnoticed”, adding: “Today’s report shows that the cuts to local government have really started to bite, particularly in the non-statutory services.”
The report said there had been a “slight improvement” in the overall condition of Scottish roads in the past seven years despite the cuts, but in the past year A-roads had shown a “slight deterioration”.
Scottish Conservative local government spokesman Alexander Stewart said: “People right across the country are getting completely fed up with the state of roads.
“From motorways to small residential streets, there are just too many potholes and too many problems. We can now see the reason for this is the SNP’s decision to slash funding.”
Scottish Labour’s rural economy and connectivity spokesman Colin Smyth added: “As we saw earlier this year, that can cause chaos on our roads, with streets and pavements being left ungritted. That means travel misery for commuters across the country.”
A Scottish Government spokesman said: “In spite of continued UK Government real terms cuts to Scotland’s resource budget, we have treated local government very fairly.
“This year’s Budget will deliver a real terms increase in revenue investment for local authorities with local services benefiting from an additional £170m of resource funding their communities.”