Councils will face major financial difficulties in tackling poverty and recovering from Covid while funding is slashed, a watchdog has warned.
A report by the Accounts Commission revealed “uncertainty” for local authorities in the years ahead and warned they will likely have to revise economic plans.
The probe found a 4.2% real-terms cut in budgets between 2013-14 and 2020-21, when Covid funding is taken out.
Local governments across Scotland will be forced to increase council tax to help cover costs and deliver key services such as education.
Residents will have to pay more each month while they try to cope with the cost-of-living crisis as heating bills soar.
In December Highland Council agreed to offer support totalling £3 million to help those living in fuel poverty.
While funds are squeezed, council tax will rise by 3% in Aberdeen, Aberdeenshire, Moray, Highland, Orkney, Western Isles and Argyll and Bute.
Householders in Aberdeen already fork out more than any other area in the north and north-east.
Earlier this week, city councillors voted to spare the city from controversial cost-saving measures on Monday this week.
Holyrood funding for councils was agreed last week despite opposition criticism over cuts.
‘Uncertain’
The report warned: “The long-term funding position for councils remains uncertain, with significant challenges ahead as councils continue to manage and respond to the impact of Covid-19 on their services, finances and communities.”
The Scottish Government has been urged to set out multi-year spending budgets so that local councils can plan ahead while they face financial constraints.
Council bosses have said they will have to review current funding plans due to the impact of Covid.
Accounts commission chairman William Moyes said: “Councils face serious challenges, driven by financial constraints, increasing demands on service and resources.
“Alongside these longer-term issues are the financial uncertainties caused by the impacts of Covid-19.
“Councillors must determine how to restart services, deliver differently, save money and empower communities. They must do so alongside focusing on national priorities, including climate change.”