Fife Council’s leader has warned the local authority faces more damaging cuts to vital local services due to long-term underfunding by central government.
David Ross made the comment after the Accounts Commission said that Scotland’s councils will face financial pressures “of a scale not previously experienced” in the coming years.
The public spending watchdog said councils had coped well so far with cuts to their funding.
But it warned that budgets would become even tighter in the future.
Mr Ross, whose Labour-run council faces a £77 million budget gap over the next three years, said: “This report highlights very well the huge financial challenges facing Scottish local authorities, including Fife.
“It shows that funding from the Scottish Government to local councils has fallen significantly in real terms over the last three years.
“At the same time, as the report rightly notes, demand for council services has increased, particularly in light of the growing numbers of elderly people in our communities.
“The current council tax freeze, without any alternative way of properly funding our local services, has just made things worse.
“With further funding reductions expected, Fife, like most other councils in Scotland, now faces more damaging cuts to vital local services due to this long-term underfunding by central government.
“The report confirms my view that we need an open and wide-ranging debate about the level and standard of local services we want in Scotland and how these should be paid for.
“We will be giving serious consideration to the recommendations in this report but on the whole, I believe Fife compares well with the advice on financial management and governance the report contains.”
The Accounts Commission said council debt repayments to the private sector would peak at a time when they are to face unprecedented demand for services.
The commission said annual repayments to the Scottish government’s non-profit distribution (NPD) public-private partnership debt and its private finance initiative (PFI) predecessor are predicted to rise from £488m to £600m by 2024-25.
By this time, demographic pressures caused by an ageing population and more children will be rising.
The commission said Scottish Government funding for councils had decreased by 8.5% in the last four years and many councils were now reporting gaps between their income and the cost of providing services.
English councils have faced more severe cuts by the UK Government, with a 37% reduction over five years.
Scottish councils face increasing demand to implement Scottish Government priorities, such as the council tax freeze, free personal care and class sizes.
Pressure also comes from other areas, including future spending commitments such as financing NPD/PFI debt, other borrowing and rising pensions.
Debate over a possible rise in council tax dominated the three-hour full Fife Council budget-setting meeting in Glenrothes on February 12.
Mr Ross said a combination of rising demand for services, increasing service costs, decreasing income and the continuing council tax freeze, made the coming three years “the most difficult the council has ever faced”.
Despite identifying £29m of savings in previous budgets, he said a £77m budget gap was faced over the next three years and it was clear, he said, that the council cannot make this level of savings without it having a serious impact on local services and staff.
He revealed Fife Council faced “huge uncertainties” over the next three years and said the Scottish Government has only set a firm budget for councils for one year.