Local authorities provide vital services such as education
Councils need to use cash more wisely amid the economic crisis, Scotland's public spending watchdog has warned.
Local authorities may also face more pressure on services such as social work and housing as the downturn hits, the Accounts Commission said.
In its overview of local government, the body also expressed disappointment that councils were making slow progress towards sharing services.
Local authority umbrella group Cosla said the report was "well out of date".
Scotland's 32 councils spend about £17bn each year delivering vital services, including education, social work and housing.
The Accounts Commission said improvements had been made - but warned pressures such as coping with an ageing population and delivering Scottish Government policies such as free school meals and cutting class sizes, meant working efficiently was as important as ever.
Accounts commission chair John Baillie said: "Councils are facing significant challenges, with fast-changing economic circumstances and financial pressures."
He added: "This requires effective partnership working and an even greater emphasis on improvement, efficiency and the effective use of resources."
The commission's newly-published report said it was "disappointed at the slow progress" by councils working together to share services, and urged them to give the policy "high priority" to save more cash.
The report also stated: "The current economic situation is likely to mean further demands on social work and housing and will bring pressures on income from council tax and service fees and charges."
Cosla president Pat Watters said the report was "well out of date and historical" and did not paint the full picture.
"It is a factual report which acknowledges and recognises the progress achieved by councils and the continuing trend of improvement in service delivery on behalf of our communities up to 31 March 2008," he said.
"What it doesn't do is show the progress that has taken place since March last year and, in a time of significant changes, the relevance of the report has to be questioned."