Tightening budgets combined with the introduction of a new Universal Credit benefit system mean councils are entering "the territory of making hard decisions", Holyrood's Local Government Committee has been told.
The committee was taking evidence on the impact of the Scottish Government's Draft Budget for 2014/15 from representatives from Aberdeen City Council, Midlothian Council and Falkirk Council.
MSPs were told that the introduction of the Universal Credit - which will combine a number of benefits into one single monthly payment - would put further pressure on local authorities, which have already seen an increase in rent arrears as a result of the so-called Bedroom Tax.
Kenneth Lawrie, chief executive of Midlothian Council, said: "We are finding additional rent arrears accruing at about 14,000 a week, which is quite a lot for a small council.
"I think it is a shifting landscape - you need to have money set aside to deal with it as you simply don't know what the impact will be."
Commenting on Universal Credit, his colleague Gary Fairley, head of finance and human resources, said: "We would expect a significant increase in arrears and our ability to collect them."
Budget pressures will also be exacerbated by Midlothian's growing population, which is expected to increase by 10% by 2035, the committee heard.
In a written submission, the council also admitted that the financial settlement would "inevitably mean that services which are provided or subsidised on a universal basis will either be withdrawn or service charges will increase".
Valerie Watts, chief executive of Aberdeen City Council, told the committee: "Financial pressures are already beginning to materialise within budgets in Aberdeen and it is expected that this will continue to grow with the introduction of Universal Credit."
She also cited changing demographics - an ageing population combined with increasing school rolls - as a cause for concern.
Bryan Smail, chief finance officer at Falkirk Council, said the local authority projected that over the next three years it will be hit by a cumulative budget deficit of £35 million.
"Self-evidently that will represent a major challenge for our members in having to make difficult decisions, and that process is under way at the moment," he said.
"We've given quite a high target saving for all services across the council, and that is to generate options."
Pressed on which services would face cuts, Mr Smail added: "There are certain services that councils have to do that are statutory, sitting behind that there are questions as to, okay, it's statutory, but that doesn't mean that you have to do it to a particular level.
"Just because a service is statutory, that doesn't mean it is untouchable."
Commenting on the possibility of further job losses, Mr Smail said: "The council has had a no-compulsory-redundancy policy so those staff who have gone have been by voluntary severance.
"Going forward, I fear it will be a different environment."