COUNCILS are set to further hike taxes and increase charges for services as they struggle to cope with plummeting budgets, a new report has indicated.

The Accounts Commission, the public spending watchdog for local government, warned of “continued and increasing financial pressures on council services” in the coming years.

It said council tax rises and increased fees had been used by town halls to boost finances amid reduced funding from central government.

However the watchdog said "difficult decisions" lay ahead, and pointed to recent cuts in environmental services, roads and transport as it suggested further savings will need to be found.

Scottish council taxpayers were charged an extra £189 million last year to reduce the impact of local government cuts, figures show.

Meanwhile, funding for local services was £220m lower in real terms in 2017/18 than the previous year, with most of the shortfall being made up for by increased council tax and charges.

The Scottish Government slashed the cash it gives to councils by 6.92 per cent between 2013/14 and 2017/18. During that time, its own revenue budget fell by only 1.65%.

Scottish Tory local government spokesman Alexander Stewart said SNP cuts meant council tax payers “have been forced to step in and pick up the slack”.

He said: “In some parts of the country, these council tax hikes have made it impossible for normal working families to move to homes they need.

“Yet all of this could have been avoided if SNP ministers, at the very least, had maintained levels of funding for local government.

“This has been a lose-lose scenario for those paying council tax, who are now worse off and still experiencing a below-par level of service.”

In 2017/18, 24 councils increased council tax, while this year all local authorities ushered through hikes.

The Accounts Commission said overall increases in spending in education and social work had been offset by reductions in other services.

And it said a five-year financial strategy published by Scottish ministers earlier this year “identifies greater future uncertainty and likely further reductions of 9% in real terms over the next five years in 'other non-protected' council funding”.

The watchdog noted: “The financial outlook is for reductions in Scottish Government revenue funding to councils.

“This will mean continued and increasing financial pressures on council services, especially those that are not protected.”

Councils depend on Scottish Government funding for a significant part of their income.

Graham Sharp, chair of the Accounts Commission, said councils did a “good job last year in managing resources as budgets are tightened and demands on them rise”.

He said: "It's not been easy but the pressure on them – and the key services we all rely on – shows no signs of easing."

A Scottish Government spokesman said: “Despite continued UK Government real terms cuts to Scotland’s resource budget, we have treated local government very fairly – and in the current financial year councils received a real terms boost in both revenue and capital funding.”