John Swinney sets out new funding plan to councils

Finance Secretary John Swinney has held talks with local government representatives in a bid to resolve a row over council budgets.

Mr Swinney said he wanted to protect the council tax freeze, invest in social care and maintain the pupil-teacher ratio in Scotland's schools.

Scotland's 32 councils now have until 2 February to respond to the plan.

Many councillors had voiced concerns about this year's funding offer from the Scottish government.

The original deadline for councils to accept the deal had to be delayed.

Mr Swinney said: "I am absolutely committed to continuing a positive, collaborative relationship with Scotland's local authorities, and I have engaged in open discussions with Cosla on what is a challenging but fair settlement for local government in Scotland.

"This settlement is an opportunity to transform the provision of social care in Scotland with a £250m investment in integrating health and social care services - helping to make our services fit for the challenges of the 21st century."

Budget pressures

He added: "We recognise that there are pressures on budgets being felt across the whole of the public sector, as well as in households throughout Scotland.

"That's why it is important to maintain the Council Tax freeze while we consider ways to replace it - as well as reimbursing local authorities to ensure they can continue to provide essential services."

Councils get the bulk of their money from direct Scottish government funding plus business rates.

This year they are set to receive less in total while many say they will get less than they had originally forecast. This has left some looking for fresh cuts and savings urgently.

Some councillors are hoping for progress on funding social care

A few councils are actively considering the possibility of ending the council tax freeze.

Any council which does increase tax rates would have to give up money allocated to them by the Scottish government to compensate them for the freeze - this means any rise would have to be significant.

Moray Council is the only one so far to make a firm proposal - it says council tax bills would have to rise by 18% to protect services.

Cosla, which represents most Scottish councils, had said the package of measures for local government within Mr Swinney's budget, including the council tax freeze, was "totally unacceptable".

A spokesman added: "We are still in active negotiations with the Scottish government around the 2016/17 settlement."

So far, only Edinburgh Council has set a budget which, implicitly, means they are accepting the government offer.