Kate Forbes finds £120m for councils to help keep tax rises down

She said the money was equivalent to a 4 per cent rise on council tax, allowing councils to avoid “inflating-busting” increases.

She said the money would also help councils with a £70m increase in their employers’ national insurance bill from April under UK Government plans to fund heath and care spending.

However the extra cash still falls far short of the demands from councils, who until today said they faced a £371m real-terms cut in 2022/23.

Ms Forbes was speaking as MSP debated the principles of the Scottish Government budget or the coming year.

The Skye MSP had previously insisted that all the budget had been allocated next year.

However she said that in recent days, the UK Government had increased its funding for Holyrood’s budget in the current year, allowing her to carry some spending forward.

She said councils had asked for £100m to pay for particular pressures, but the Government had decided to go further.

She said: “We now have some new and additional flexibility in this year’s funding.  Therefore I will utilise the Scotland Reserve to carry forward £120m of resource funding.”

She said local government would have complete discretion in how it spend the money.

The extra would take its total funding to £12.6billion next year.

She also said the total £46bn budget for 2022/23 would help tackle poverty, support the economy and cutting carbon emissions.

Scottish Liberal Democrat MSP Willie Rennie said that, despite the extra money, Ms Forbes still had her foot on the neck of councils who faced “massive cuts”.

Tory MSP Liz Smith thanked the UK Government for its extra support, but said councils still faced challenges and cuts, and said the Scottish Government shouldn't be spending millions on preparing for an independence referendum or doubling up on external affairs.

She also said she had concerns about SNP plans for a new National Care Service, saying it had "all the signs of being an extremely costly reorganisation" that was "the very last thing care workers need right now".

She said the Tories would oppose the budget at Stage One as it did "nothing to properly Scotland's economic future or to safeguard essential local services".

She said: "After repeated calls from the Scottish Conservatives, the SNP have managed to find an extra £120million in their Budget for local government - but this doesn’t even come close to what councils need just to maintain basic services.

“Local authorities are still facing an enormous £250million real-terms cut in April, despite a record block grant from the UK Government last year.

“It means Scotland’s 32 councils will now have to choose between delivering essential public services on the cheap or punishing local residents with drastic Council Tax hikes.

“The SNP has neglected local councils for years, and they can no longer cope with these devastating cuts.

“The Scottish Conservatives now plan to bring forward a bill to enshrine fair local government funding in law, and end the SNP’s chronic underfunding.”

Labour MSP Daniel Johnson said the extra £120m for councils was welcomed, but it still left them underfunded by £250m, and said Ms Forbes finding money down the back of the sofa was not a serious way to put a budget together.

He said already difficult decisions had been made harder by SNP "mismanagement" of the economy.

He said: "When it comes to the economy, the Government's constiutional distraction leaves Scots less money in their pockets and this Scottish Government with less money to invest in public services and recovery."

He added:  "We needed a budget for recovery but this is a budget for business as usual. We need a recovery focussed on jobs and built on strong and resilient public services. This budget delivers neither that focus nor foundation. 

"Instead it offers an insulting pay rise of just 48p for those so​ critical to delivering care during the pandemic.  

"At a time when we have record high waiting lists, we have no serious plan to tackle waiting lists. 

"At a time when we have a cost of living crisis, we have no plan to protect household finances.  

"The people of Scotland deserve so much better than this.”

Scottish LibDem leader Alex Cole-Hamilton said councils still faced a real-terms budget cut of around £250m collectively, making service cuts "inevitable".

He accused the Scottish Government of treating councils in a "Thatcherite" manner by short-changing them every year, then finding a little cash, and expecting to be thanked for imposing a smaller cut than the one that initially "terrified" authorities.

He said: “With the cost of food and energy soaring, not to mention the increase in national insurance, and the cut to universal credit many people are feeling the squeeze like never before. It’s not clear that this budget recognises that reality.

Scottish Greens finance spokesperson Ross Greer said: “Despite the backdrop of a billion-pound cut from the UK Government, the Scottish budget has delivered on our key Green priorities of tackling child poverty and the climate emergency.

“This budget funds the first full year of free bus travel for young people, which begins this coming Monday. And today we have also been able to agree to increase funding for councils, which will see an extra £120m funding for local services on top of what was previously committed, increasing their overall budget by more than a billion pounds.

“Every year Labour and the Conservatives resort to making uncosted demands on a fixed budget without suggesting where the money should be cut from or which taxes should be raised. It’s clear the constructive approach adopted by the Scottish Greens, one which delivers tangible results for the public, is the one increasingly preferred by voters.”

MSPs later passed the Stage One vote on the budget by 69 to 54, with the SNP and Greens in favour and all other parties opposed.

The local authority umbrella group Cosla said council leaders would meet tomorrow morning to consider Ms Forbes's statement before responding.