COUNCIL bosses have warned that proposed budget cuts by the Scottish Government pose a “risk to the fundamental sustainability of communities”.

Cosla, which represents Scottish councils, has highlighted a £95m funding gap in the Scottish Government’s draft budget for day-to-day revenue spending – as well as a £117m shortfall for capital spending for infrastructure projects.

But Finance Secretary Kate Forbes, who disputed Cosla’s figures, told the local government and communities committee that “the funding settlement, as it stands, is a fair one”.

Gail Macgregor, Cosla’s spokesperson for resources, said the situation is “getting harder every single year” for councils and warned that the “fundamental sustainability of communities” is being put at risk.

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She added: “Councils have done well treading water but the evidence is now revealing cracks and whether its increasing reliance on reserves or declining public satisfaction rates point to a situation that is no longer sustainable.”

Ms Forbes said the Scottish Government’s offer was a “real-terms increase of three per cent”. She hinted that the Scottish Government could be open to discussions about allocating more funding to local government.

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She added: “Cosla have identified pressure points. In this budget settlement, those are the pressures we have set out quite clearly that we are funding. We have also allowed for an increase in council tax up to 4.84 per cent.

“If anybody believes that one aspect of the budget should be increased, I’m delighted to talk about that. But we have to be clear about where it’s going to come from.”

But Jim Boyle from CIPFA (Chartered Institute of Public Finance and Accountability), said that all council across Scotland will be “factoring a savings programme into their budget for next year” and that most are likely to increase council tax by the maximum amount allowed.

He added: that councils raising council tax by the maximum of 4.84 per cent was “a pretty common picture across the country.”

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Ms Forbes was asked if she accepted that councils will be forced to make budget cuts this year.

She said: “I don’t accept that’s going to happen. It’s entirely a decision for local authorities.”

But councils believe the £590m of Scottish Government commitments to be provided by local authorities, has only been allocated £495m of funding from Holyrood.

Ms Macgregor added: “The Scottish Government said it would fully fund all of its new commitments. We are funding at the expense of other areas of the council budget.”