WATCHDOGS have condemned one of Scotland’s most fractious local authorities for presiding over a deepening funding crisis amid concerns it will lead to tax rises, job losses and service cuts.

A scathing report has found that 18 months on from a damning inspection, Falkirk Council has seen its £46 million black hole widen by one third to £61m.

The Labour-led authority, one of the most politically fractious in the country, has been told it must make “radical changes” to how it does business and makes reference to its practice of holding meetings in private.

The council has told the Accounts Commission that among its plans to deal with its cash crisis is raising council tax, and that it has appointed a troubleshooter to help try to turn the authority around.

The report comes just a fortnight after long-standing leader of the council, Craig Martin, announced he was quitting politics.

Mr Martin, who survived a vote of no confidence after a row involving grant aid to the Orange Order, claimed recently that making budget cuts caused him “emotional stress”.

The authority will set its budget just before Christmas with an immediate target of around £25m in savings and warning it’s residents of “unpalatable cuts”.

Defending his council and the strains it was working under, Mr Martin said he had been given only several months to turn the authority around. He also pointed to praise for better cross-party relations and warnings this week by the Accounts commission that local government faced a new wave of cuts and pressures of more than £500m.

But the report, carried out by Audit Scotland, criticises Falkirk for its “small-scale” pace of change, adding that it was “disappointing” its appeal to the council to improve had not been acted upon.

The watchdog acknowledged that the increased cash gap in the coming year were as a result of cuts to the amounts paid to councils by the government, with Falkirk indicating council tax rises, changes to terms and conditions and “strategic reviews” to bridge the gap.

But Audit Scotland added said all councils were currently facing major cash crises and this made the need to better prepare finances and working practices all the more important.

It said Falkirk was unlikely to be in a position to deal with the current economic environment as it had not changed quick enough and continued to rely on “small-scale savings projects, service reductions and service charge increases”, describing this as “not sustainable in the longer term”.

It also slated Falkirk for failing to spell out its clear priorities, including how it has dealt hundreds of redundancies since 2014 in the past couple of years. It has shed almost 500 posts since 2014 and has warned another 200-plus were at risk.

Douglas Sinclair, Accounts Commission chairman, said: “All councils need to get to grips with looming budget shortfalls over the next three years, but Falkirk has been slow to realise the scale of what is required and make effective plans for it.

“It must now grasp this nettle and meet the challenges it faces through strong leadership both from councillors and its management team.”

Mr Martin said: “Like many other local authorities across the country we are facing the most challenging times but we are pushing ahead with changes that will make a significant difference to how we operate and how we deliver services to our communities.”

Cecil Meiklejohn, leader of the SNP opposition, said: “The inspection was thorough and the findings were clear; there is more to be done. We are determined to work constructively to ensure this happens and to deliver the best outcomes for our communities.”