Comhairle nan Eilean Siar’s cash budget has fallen by some £15m over the past six years.
On Wednesday the Comhairle will set its budget for the financial year 2016/17 and Leader Angus Campbell has described it as: “The most difficult I have been involved in.”
The Comhairle has indicated that the Council Tax freeze will continue because of the £2.2m financial penalties that would otherwise be incurred.
The settlement from the Scottish Government is a 3.5% reduction for Local Government as a whole, but the effect of the distribution formula is a reduction of 4.5% for the Comhairle.
The real terms decrease in revenue allocations from 2015 to 2017 for the Comhairle is 5.9% - the second highest decrease in Scotland.
The budget setting follows extensive community consultation across the Islands with over 200 people attending consultation meetings, more than 500 responses to an online survey and over 760 people viewing the budget discussion on Facebook.
Mr Campbell said: “The budget recommendations coming before the Comhairle have been arrived at in a collaborative fashion by Members and communities working together.
“It is the single biggest process of participative budgeting in the Western Isles and I would like to thank everyone who has taken part. However, at a time of financial austerity it is only possible to set a budget within the finances we have been allocated because of the groundwork that we have put in over recent years.
“The reality is that when obliged to make savings on such a scale, we will not be able to meet everyone’s wishes.
“However, we have listened carefully to our communities and their priorities - I believe that this has been reflected in the difficult process of setting the Comhairle’s budget.”