CIMA claims that only a small number of authorities have embraced the new structures and techniques to cope with competition.
The study found that only 57% had introduced methods such as service level agreements and few used formal methods to assess the services their customers demand.
Among the councils which had introduced SLAs, the survey found that few had restructured their departments on a 'business unit' basis.
The CIMA survey suggests that local authorities are fighting shy of proving their mettle.
In-house finance directors need to take positive steps to foster and promote a 'customer first' perspective if local authority services are to continue to be provided, said CIMA.