Scottish Secretary David Mundell is to warn today that cities, towns and villages risk being left behind other parts of the UK if Holyrood does not "step up and send real powers to the people."
Mr Mundell will make his comments in Glasgow as he sets out what he claims is a radical vision of how Scotland could be governed.
Under the plans, local authorities would have more control over areas like health, transport and policing while towns and villages could take more control over their own affairs.
It comes after the chief executive of the local government umbrella body, Cosla, warned that councils will have to present “really aggressive” budgets with “unpalatable options", including compulsory redundancies and education cuts, to cope with a £350 million squeeze announced last week by Deputy First Minister John Swinney.
They have already said the last week's annual Budget is "catastrophic" for jobs and services in the sector.
Mr Swinney allocated £10.3 billion for local government as part of his spending plans for 2016, which local government body Cosla said amounted to a £350 million cut.
Mr Mundell will argue that councils' concerns about the futures they face mean it is time for an "honest and frank" debate about the way forward for them.
He will say: "The interminable debate about Scotland's constitutional place within the UK has drowned out debate about how power and responsibility is distributed within Scotland.
"The referendum was decisive and an obsession with independence can no longer be an excuse to ignore this issue. It's time for Holyrood to step up and send real powers to the people.
"There is a revolution going on in local government across the rest of the United Kingdom, with local areas regaining power and responsibility at an unprecedented rate. Scotland cannot afford to be left behind.
"This is a good time to start that debate, in the week following a Scottish Budget which put local government in the spotlight.
"The choices which the Scottish Government have made are significant.
"Serious cuts to local authority budgets and absolutely no new powers to raise their own funding. In fact the reverse - with the council tax freeze retained for a ninth consecutive year.
"Councils across Scotland are rightly concerned about the futures they face and it is about time we had an honest and frank debate about it."
The Scottish Secretary will stress that he is not advocating a reorganisation of local government but bringing an end what he sees as a "one-size-fits-all" approach for councils.
He will urge the Scottish Government to "follow the lead of the UK Government" in devolving powers to cities, counties and towns across the rest of the UK.
Meanwhile, Rory Mair, chief executive of Cosla, told the Sunday Herald yesterday: “Some councils, very reluctantly, will get to the stage where compulsory redundancy rather than voluntary redundancy has to be contemplated.
“We’re not joking when we say there’s going to be a substantial job loss as a result of this.”
The Scottish Government has insisted that it has treated councils fairly with with settlements maintained on a like for like basis over 2012-16.
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