Scotland must rethink how it delivers its public services in the wake of Covid and Brexit, Finance Secretary Kate Forbes said yesterday.
She added that the public sector had grown for years, but now needed to "reset" and become more efficient.
Ms Forbes was speaking as she outlined the Scottish Government's spending plans for the next five years.
The BBC says the spending review suggested there would be real-terms cuts in several areas of the public sector.
These included local government, higher education, the courts service, culture and external affairs.
Ms Forbes said spending would be prioritised in areas such as health, education and tackling climate change.
Health spending is due to rise from £17.1billion to £19billion over the next five years, while funding for social security benefits will increase from £3.9billion to £6.3billion in cash terms.
The overall budget for the Scottish Government is due to increase from £41.8billion to £47.5billion.
Ms Forbes admitted that the government "cannot prioritise everything", adding: "We do need to reshape and refocus the public sector post-Covid and the spending review calls upon all of the public sector to look creatively at ways to sustainably address that challenge."
She also said the government would seek to ensure public-sector workers were given "fair" pay increases, but warned that it was having to operate with a "severely limited budget".
The Institute for Fiscal Studies has said the Scottish Government is facing a £3.5billion gap opening up between spending and income as a result of generous spending pledges and revenue from taxes being less than expected.
The institute's David Phillips told the BBC that budgets for local government, the police, justice, universities and rural affairs were due to fall by about 8% in real terms over the next four years, while spending on enterprise, tourism and trade promotion was set to fall by 16%.
Although health spending was set to increase by 2.6% in real terms over the next four years, he said this would be "slower than needed", adding: "Health services could really struggle."
But social security spending is forecast to increase by 48% as new, more generous, Scottish benefits replace UK-wide benefits.
Scottish Conservative finance spokeswoman Liz Smith highlighted the "gaping hole" between projected public spending and tax revenues.
Labour finance spokesman Daniel Johnson criticised the lack of detail, and pointed out that the government had managed to find £20million for a second independence referendum despite freezing spending in other areas.
A UK Government spokesman told the BBC that Scotland was benefiting from unprecedented support.
He added: "The Scottish Government's official figures show being part of the UK is worth more than £2,200 every year for each person in Scotland."
STUC general secretary Roz Foyer said the review will "ring alarm bells for many public-sector workers".
The Scottish Government says building a stronger, fairer and greener economy is one of the key policy areas where spending will be prioritised.
This includes:
- Capital investment of £581million to support the economy, including enterprise agencies and the Scottish National Investment Bank.
- Continuing through the inward-investment plan to attract high-quality inward investment in areas such as energy transition and the space sector.
- Pushing forward with the export-growth plan, A Trading Nation, to scale up Scotland's international reach.
- Embedding entrepreneurship in education, to give young people opportunities to start and grow businesses.