SCOTTISH council leaders have expressed their “extreme disappointment” with the funding settlement offered by SNP ministers – insisting the deal is a “massive real-terms cut” for authorities.

The Scottish Government has been warned that the current draft settlement “will lead to socially harmful cuts to vital local services and the loss of jobs within local authorities”.

Yesterday, Deputy First Minister John Swinney announced in his draft Budget that local government will get a funding boost of £550 million next year and the freedom to set its own rates of income tax.

During his Budget speech, Mr Swinney pointed to past episodes where "valuable time and energy are taken up in fractious debates about resources and accountability for spending them". 

He added that a "new partnership" with local government should be established to "create a more effective way of working together".

But that new relationship lasted less than 24 hours as council leaders, including the SNP leader of Cosla, criticised the draft settlement by the Deputy First Minister.

At a meeting of council leaders at Cosla this afternoon, the umbrella organisation for Scottish authorities, chiefs agreed an amended motion unanimously that “most of the supposed £550m additional funding is for existing commitments”, adding that “the £71m of uncommitted funding goes no way towards meeting the identified budget gap in council funding of £612m due to inflation, energy prices and demand pressures”.

Council leaders have pointed to a “requirement for more than £400m likely to be needed for pay settlements in the coming year to address recruitment and retention issues and avoid understandable industrial action by trade unions”.

It adds: “This budget settlement means another massive real-terms cut in councils’ core funding, after more than 10 years of real terms cuts, and will lead to socially harmful cuts to vital local services and the loss of jobs within local authorities and from local companies that rely on councils for their employment.

“Leaders note the impact of inflation, the UK Government’s mini-budget and global economic factors that continue to weigh heavily on budgets and the Scottish Government.

“Leaders further note the additional burden on council finances from revaluation of non-domestic properties and condemns the threat by the Scottish Government to cut grant funding if councils were to be successful in appealing against redeterminations.”

Council leaders agreed that Cosla should “make a robust public response to the budget statement, challenging in the strongest possible terms the presentation of the £550m additional funding”.

Cosla will invite Mr Swinney to a special meeting with council leaders, while all council leaders will sign a joint letter to First Minister Nicola Sturgeon “highlighting the massive real terms cut to council funding and the impact this budget settlement will have on vital local services and on the most vulnerable in our communities”.

Cosla has also renewed its opposition to the Scottish Government’s plans to centralise adult social care, calling on SNP ministers “to pause the current plans for structural change” and instead “redirect the funding allocated within the Scottish Budget into social care and preventative services through local government”.

Cosla resources spokesperson, Katie Hagmann, said: “Council services will now be at absolute breaking point and some may have to stop altogether. 

“This is a result of cuts to our councils’ core budgets and direction on spend towards other Scottish Government priorities over the last few years. 

"Yesterday’s budget announcement compounds this and there is a real risk that many of our essential services will not only be cut but may have to stop altogether.

“Council leaders were unanimous today that we need to work together, with one local government voice, to raise our concerns at the highest level.

“The Fraser of Allander Institute has already commented on the settlement stating that although Scottish Government has presented a cash increase for Local Government, Councils will see a 'real-terms decrease relative to a GDP deflator of 4.9 per cent'.”

Scottish Conservative shadow local government secretary Miles Briggs, said: “This damning verdict from Cosla totally undermines John Swinney’s boasts of delivering a fair deal for local authorities yesterday.

“Once again, the reality is that the SNP-Green government have passed down brutal cuts to our councils. Council leaders concerns that were made clear before the Budget have failed to be heeded by ministers and the impact of this settlement will be devastating for our communities.

“Services that residents rely on could be lost forever under John Swinney’s current budget proposals. He should stop with the shameless spin and instead step up and ensure our councils have the funding they need.

“While tough decisions have to be made, our councils should not always have to bear the brunt of SNP-Green cuts. Many of them simply have no more room to manoeuvre when it comes to managing their finances, while still delivering local services.

“John Swinney should be ashamed at trying to say his Budget protects our local authorities, when the exact opposite is the case.”

Scottish LibDems economy spokesperson. Willie Rennie, added: “The SNP have played this old trick for years now. 

"They instruct councils to do more but only give them some of the money to deliver it. Then they have the cheek to claim they are being generous. 

"And it’s the council workers and the people who need the services that suffer.”

But the Scottish Government rejected the claims by Cosla.

A Scottish Government spokesperson said: “We have protected councils in the most challenging budget since devolution to provide more than £13.2 billion in the 2023-24 local government settlement.

“This represents a cash increase of over £550 million, or 4.5%, which is a real terms increase of £160.6 million, or 1.3%.”