Decisive leadership is needed to ensure council services remain sustainable, the public spending watchdog for Scotland has warned.

In its annual report, the Accounts Commission said councils have faced a real terms funding cut of 9.6% over the last eight years. It said councils must clearly set out the impact budget reductions are having so they can plan for the future.

The report found that while some councils have maintained or improved their performance in a number of areas, public satisfaction has fallen in areas such as refuse collection, street cleaning and libraries.

The report also said that without service redesign or policy changes councils could be spending nearly 80% of their budgets on education and social work alone by 2025/26.

Graham Sharp, chair of the Accounts Commission, said: 'Councils are facing the major challenge of reducing costs, maintaining services for an ageing population and putting significant policy and legislative change into practice - all at a time of increasing uncertainty.

'They have done a lot to manage the impact of budget reductions, but with forecast funding gaps higher than current levels of reserves for some councils the delivery of savings is now increasingly critical.

'Decisive leadership, innovative thinking around service delivery, and robust planning based on community engagement is now more important than ever to ensure council services stay sustainable.'