North Lanarkshire Council faces a growing budget gap of nearly £137 million over the next five years, said a report from The Accounts Commission.

“It must signal how it will bridge this gap, setting out clearly how services will be delivered in the longer-term with the money available,” said the report.

“The council is in a strong position to address the challenges but needs to set its intentions out clearly, as well as setting out how it will report its performance publicly and concluding the review of how decisions are made and managed.”

The report said the council is focused on improving its residents’ lives and has “strong foundations” to make the major changes it needs to tackle tightening finances.

The Accounts Commission said the council “is committed to improving local communities and investing in the local economy.”

The report said: “The council has some of the best performing housing and homelessness services in Scotland. There is a strong focus on working with partner organisations.

“This includes work across health and social care and creating opportunities for young people in the area to learn and develop their careers.

“However, there are clear challenges ahead. Satisfaction with council services continues to decline …”

Jo Armstrong, Chair of the Accounts Commission said: “Staff at North Lanarkshire Council are committed to engaging with communities, with a clear focus on partnership working. But the financial challenges are increasing and it’s clear the performance of services is mixed, and overall satisfaction is declining.

“Change is vital to secure services for the future. The council must focus on where limited resources are best spent, understanding the impact of investment and change on service performance, satisfaction rates and whether these changes are improving the lives of local people.”