Commenting on the report, Cllr Ricky Bell, COSLA Spokesperson for Resources, said:

“While we acknowledge increases in uncommitted funding in the local government settlement, today’s report reinforces the message that local government finances are under severe and growing strain.

"Councils have worked hard to manage budgets responsibly, delivering significant savings year on year and meeting the vast majority of savings targets. However, there is a clear limit to what can be achieved without impacting the services communities rely on. Increasing reliance on reserves, borrowing and fees and charges is not a sustainable long-term solution.

"As we look ahead to 2026/27, the budget settlement falls far short of what is needed to sustain essential local services without difficult decisions being made locally.

"We are especially concerned by the continued underfunding of social care and the Real Living Wage across portfolios.

"The medium-term outlook for local government is deeply concerning, with continued de-prioritisation and the prospect of significant real-terms cuts. If councils are to remain financially sustainable and continue delivering for communities, there must be a more honest conversation about funding, priorities and local flexibility.

"Urgent action is needed to ensure councils have the resources and certainty required to support Scotland’s people and places now and in the future.”