SPENDING on Scotland's roads has dropped by a over a quarter with satisfaction with schools also on the decline, amid warnings budget restraints are beginning to impact on core council services.

According to a new report, local government faces a 17 per cent gap over the next five years running into hundreds of millions of pounds between the cost of meeting demand for services and available funding over the next five years.

The organisation which reports on the performance of councils said many of the savings local authorities have made in the past five years cannot be replicated and that "further gains will be much harder to achieve".

The Local Government Benchmarking Framework report comes amid an increasingly bitter row over a £350m cut to council budgets in 2016-17, and a threat by Finance Secretary John Swinney to impose multiple sanctions on any local authority that tries to raise funds by breaking the council tax freeze.

The most senior official in local government yesterday warned the relationship between councils and the Scottish government has become so “toxic” amid arguments over budgets and responsibilities that it is now on the brink of outright collapse.

Rory Mair said relations between central and local government were close to becoming “truly horrible”, with services suffering as the two sides waged a destructive public feud.

According to the report, councils absorbed a 5.2 per cent real reduction in spending between 2010/11 and 2014/15 through prioritising services and improving efficiency and productivity, the report said.

All service areas apart from social care experienced real-terms spending reductions of more than 5 per cent, with roads suffering the heaviest cut of 27 per cent.

It said "the striking trend" across the country was that the financial tightening had "not reduced service to the public or the impact of services", citing a rise in attendances at leisure facilities, libraries and museums of more than a fifth despite a 15 per cent real-terms cut to spending on culture and leisure.

The number of pre-school and primary places in Scotland also increased by 30,000 and attainment improved despite a 7% reduction in the education budget.

But in the past year public satisfaction with schools fell from 81 per cent to 79 per cent, while satisfaction with social care dropped from 55 per cent to 51 per cent.

The report said: "In the last 12 months... there is evidence that the ongoing budget constraints are beginning to impact upon some service areas.

"With more severe budget reductions from 2016/17 onwards, it should not be casually assumed that these improvements will simply carry on.

"Many efficiency and productivity gains have been taken already and further gains will be much harder to achieve."

It added: "Our best estimate of the impact of demand and costs pressures across the period to 2020/21 is that a gap of over 17% will open between the cost of meeting demand on current service models and the funding available to councils."

Councillor David O'Neill, president of local government body Cosla, said: "Sadly the latest cut looks like being a step too far. However, as always we will continue to do our very best for the communities we are elected to represent."

A Scottish Government spokeswoman said: "Councils need to understand how they are performing in order to continue to identify and introduce improvements while maintaining the quality of their services and improving outcomes for their communities.

"The value of benchmarking is in how councils use it to continue to refine the way they work, make best use of resources and to improve outcomes for local people."

Meanwhile, new research by the GMB union claims more than 25,000 jobs across the UK are under threat because of cuts to council spending.

The GMB, whose data includes around 8500 jobs in Scotland, said it was now involved in daily meetings with councils in a bid to scale back the cuts and loss of services.

Meanwhile, the best-selling author Philip Pullman has urged politicans to save closure threatened school libraries.

The Scottish Parliament's petitions committee heard calls fror a national school library strategy to ensure that books are highly accessible to all childen.

Mr Pullman, who wrote His Dark Materials trilogy and is president of the Society of Authors which is fighting to keep libraries open, told the Sunday Times: "The library should be at the heart of every school."