Councils have never faced such a challenging situation.
In this year's Accounts Commission's overview of local government, we report that demand and workforce pressures have been deepening after the pandemic and funding is forecast to reduce in real terms.
Radical change, through greater collaboration, is urgently needed if councils are to maintain services.Read the report in detail
There are signs that the sector is in crisis, with growing backlogs, declining satisfaction and no clear picture of demand or unmet need.
Housing performance indicators fell during the pandemic as a result of increasing financial hardship and Covid-19 restrictions limiting access to properties.
During the first year of the pandemic homelessness fell as a result of emergency extra protections but it is rising again.
Performance declined during the pandemic, including a drop in recycling rates and street cleanliness levels.
Services were severely affected by the pandemic and future risks are significant.
Performance during the pandemic was mixed, attainment and progress towards closing the poverty-related attainment gap stalled but has shown some recovery.
Performance declined during the first year of the pandemic, as activity was refocused on Covid-19 financial support, but shows signs of recovery.
Indicators capture national performance before the recent cost-of-living crisis and inflationary cost pressures.
Source: Selected indicators from the Improvement Service's Local Government Benchmarking Framework, 2021/22, and Scottish Government's homelessness statistics, 2021/22
The Improvement Service publishes information to help members of the public understand how well their council is performing across a range of council services. You can find more about your own council's performance here.
Costs are going up and the amount of money councils receive to run services is set to get less.
Changing demographics, the pandemic and the cost-of-living crisis increase pressure on council services at a time when councils have less capacity to support them.
As well as focusing on providing local services councils must help to tackle national issues such as climate change, child poverty and inequalities.
Councils are finding it difficult to recruit the staff they need to run some services, in particular social care. There are also high sickness absence levels.
Some councils don't have strong leadership or have a high turnover of senior staff.
Communities must be involved in these conversation and work with councils to make difficult choices about the future of their local services.
This could mean councils working together to provide services.
Councils also need to better understand the experience of service users, and work with communities to redesign services.
The New Deal for local governmentTim McKay Acting Chair of the Accounts Commission
is long overdue. It will give councils longer-term financial stability, supporting them to make decisions and make the fundamental changes urgently needed.
This report follows the first two reports in the series.
Each year we publish a financial overview. The most recent one was published in January 2023.