Local council funding problems have ‘significantly increased’ due to Scottish Government cuts, a public spending watchdog has judged.

The Accounts Commission, the independent body which monitors local government spending, has outlined that the Scottish Government will cut council revenue funding by 5.1% in 2016/17. This will mean a total real terms cut of 11% in revenue funding from Holyrood since 2010/11.

Commission chair Douglas Sinclair said: “The Commission recognises the achievement of councils – both councillors and officers – in meeting these challenges to date. But the scale of the challenge in 2016/17 and beyond has significantly increased because of the local government funding settlement. The settlement has substantial implications for services to the public, councillors and the local government workforce.

“Next year councils and health boards, through health and social care partnerships, jointly have the responsibility to make a significant start in the shift from hospital care to care at home and care in the community. This is the most far-reaching public service reform since the establishment of the Scottish Parliament.

“And these challenges are compounded by: a one-year financial settlement, cost pressures, increasing demands on services from an ageing and growing population, the ambitions of the Community Empowerment (Scotland) Act 2015, and the political pressures created by elections in both 2016 and 2017.”

The Scottish Government however has disputed the figures which the Commission has published.

A government spokesman said: "The figures in the report are incorrect. The actual figures, taking into account the addition of the £250 million to support the integration of health and social care, show that next year's reduction in local authority overall estimated expenditure is less than 1% - and that does not take account of the additional money that we are investing in educational attainment over and above councils' core school budgets."

By 2017/18 five Scottish councils (Clackmannanshire, Argyll & Bute, Aberdeenshire, Orkney and Fife) will be running a deficit of over 5%. Scottish Government cuts to council revenues are “likely to result in councils identifying even larger funding gaps,” the report found.

The report’s recommendation that “councils need to be...better at longer-term planning” was met with some criticism.

Kevin Keenan, finance spokesman for the Convention of Scottish Local Authorities, said: "The report identifies that councils quite rightly have had to make savings but, even with these savings councils have improved their performance overall.

"Yes councils can always do more to deliver services differently and the report amply demonstrates the degree of innovative delivery approaches which councils are taking already.

"But as we have sought to point out to the commission, it is all well and good saying that councils need to be more innovative. It is quite a different proposition when they are faced with increasing central direction over how they deliver services which focus on inputs, rather than outcomes for our communities."

From 2017 local councils will be able to increase their council tax rates by 3% per year. The highest three bands will also pay more from April 2017.