None of Scotland's public services should be protected from the prospect of looming cuts, according to a report from a body set up to examine the country’s finances.
The Independent Budget Review Board’s paper, published on Thursday, calls for an immediate review into all free universal services, including personal care, bus travel and eye exams.
The recommendation on reducing the public workers pay bill could put as many as 60,000 jobs at risk.
And the group has also suggested the continuing freeze on council tax could be unsustainable, suggesting ministers consider whether it could be “discontinued”.
The Government has already resisted some of the recommendations, insisting services for the elderly must not be touched.
However, chairman Crawford Beveridge said: "There are very difficult decisions to be made over the next few months, requiring strong leadership not just in their making but also in their subsequent implementation.
"Clearly there are significant short term challenges.
"However important decisions need to be taken about the future.
"Scotland needs to decide what form and shape of public services it desires and can afford."
The group was set up by the Scottish Government to examine where savings could be made, and its report makes a number of recommendations to ministers.
It comes against a background of financial constraint which ministers believe could leave Scotland facing a £42 billion squeeze in public spending over the next 16 years.
As Scotland faces its first real terms budgetary cut since devolution, the Government is also being urged to look at the possibility of introducing university and college tuition fees, while the Tories have called for Scottish Water to be privatised.
The group has now recommended an immediate recruitment freeze across the public sector be considered, as well as suspending the final stage of the abolition of prescription charges.
The report also calls on the Government to reduce public service employment by up to 10% by 2015.
Following its publication, Finance Secretary John Swinney thanked the team behind the review for their “commitment”.
He said: "The Review findings consider a landscape that results from years of financial mismanagement of public spending, with Scotland's budget forecast to shrink by £3.7bn in real terms over the next Spending Review period as a result of Westminster spending cuts.
“Some two thirds of the cuts planned at the UK level are the legacy of the previous UK Government, the other third the design of the Westminster coalition's emergency budget that cuts too far and too fast.
"The Review can only offer options within our current powers, and it underlines the absolute need for the Scottish Parliament and Government to secure financial responsibility and the same economic powers that other nations have so that we can take decisions to boost economic growth and revenues in Scotland.”
The report focused on four areas for possible cuts - the public pay bill, efficiency savings, universal benefits and capital spending.
It states all areas should be subject to scrutiny without any "presumption of protection". And it warns the prospect of ring-fencing an area like health from cuts, as the UK Government has promised in England, would leave other departments in Scotland facing a budget cut of more than 20% by 2015.
Sir Crawford added: "We suggest the people think very carefully before they try and squeeze that sort of number out.”
The NHS, with a budget of around £11.5bn, accounts for 30% of public spending in Scotland.
Sir Crawford said the report did not contain a "nice easy formula" for the Government to make the cuts needed in the coming years, but instead set out a range of options.
He added: "It's going to have to be a mixture of what they think they can achieve in efficiency, the overall pay bill, what can be done in terms of universal spending and capital spend.
"They're going to have to take all of those and get to some reasonable picture."
The "huge numbers" are contained in the public pay bill, which accounts for 60% of spending in Scotland, while efficiencies are becoming "harder to find".
The group's remit was to recommend options for cuts while maintaining current levels of frontline services.
Sir Crawford added: "It is going to be difficult - we are going to have to make difficult choices in other areas if that's what we're trying to do."
However, Mr Swinney insisted that no matter how hard the task, Scottish Water should remain in public ownership and services for the elderly should not be touched.
He added: “Clearly there is no need to pursue all of these as they would generate far more savings than is actually required.
"The Government has made clear our determination to protect the vulnerable - which is why for example we will preserve existing eligibility for free personal care and concessionary travel. And we will apply any Barnett consequentials arising out of the protection given to the health service by the UK Government to the health service in Scotland.
"Our task now is to encourage the widest possible debate about the range of options that are contained in this Review.”
IN DETAIL
- VIDEO: Interview with Finance Secretary John Swinney
- VIDEO: Interview with Crawford Beveridge, chairman of the Independent Budget Review Board
