Councils 'spend £40,000-a-minute', says Audit Scotland
Scotland's councils spend almost £40,000 every minute and must do more to make sure they deliver value for money, the spending watchdog has said.
Audit Scotland said efficiency savings in the current financial climate would only go so far and decisions may be needed on which services to cut.
The watchdog said better information on where money was being spent would mean better services for taxpayers.
The report came just days after elections to Scotland's 32 councils.
Local authorities spend £21bn every year providing vital services, such as education, social services and care for older people.
But they are facing Scottish government funding cuts in real terms of more than £720m over the next three years, said the report prepared by Audit Scotland for the Accounts Commission.
The watchdog said local authorities needed to get better at using information on costs to plan the funding of services, squeezing the most vale of every pound.
"An improved understanding of costs is not an end in itself," report said.
"Understanding what things cost is an important factor when making policy decisions. Councils face significant financial challenges.
"Councils recognise that, in the current financial climate, making efficiency savings will only go so far. More fundamental decisions will have to be taken about the levels of service on offer and whether some services may need to be withdrawn altogether."
The report added: "Councils need to have a clear understanding of the level of service being provided, and at what cost, to be able to identify whether further efficiencies are achievable.
"Councillors need to be clear about which services are most important."
The report also said councils should be more open about costs, to help people understand the difficult decisions which cash-strapped local authorities have to make.
Accounts Commission chairman John Baillie, said: "The new councillors elected last Thursday have to get up to speed very quickly.
"We hope this report will help them scrutinise policy and get the right information on both quality and cost of services.
"It can be down to simply asking the right questions of officials and sharing information and best practice with other councils.
"This is a big challenge but it can deliver real dividends for councils and their communities."