Councils have had their budget slashed by more than £300m in this year’s Budget.
Opposition MSPs said the cut would “rip the heart” out of local services.
But Derek Mackay, the Finance Secretary, said local authorities will get a £240m boost to their spending power as part of his wider package for local authorities.
Mr Mackay laid out his tax and spending plans to the Scottish Parliament in the first budget since Holyrood took control of a raft of major new powers.
His key announcements include:
- No changes to income tax rates, but the SNP will not replicate the UK Government’s tax break for middle and top earners
- The rubber-stamping of a financial deal with Dundee City Council to help create 500 jobs on the Waterfront
- Higher council tax bills for people living in more expensive homes and discretion for councils to raise the levy by a maximum of 3% a year
- An extra £300m for day-to-day NHS budgets and the protection of police budget against real-term cuts
- Business rates reduced, with the poundage cut by 3.7% to 46.6p, but the large business supplement remains higher than in England
- Headteachers to be given £120m direct from central government to close the attainment gap
Mr Mackay said: “The plans I have set out exercise our new powers responsibly, marking a significant step in the history of the Scottish Parliament.
“It is a Budget that holds fast to our programme, that delivers on our commitments and protects Scotland’s hard-won social contract.”
But opposition politicians criticised the budget for delivering another blow to councils’ already depleted coffers.
Kezia Dugdale, the Scottish Labour leader, said it will “see the heart ripped out of public services”.
“However, the Finance Secretary tries to spin it, today’s budget means a real terms cut of £327 million from the SNP government to local services,” she added.
Mr Mackay said that sum is offset by measures including councils being able to tap into NHS cash as part of health and social care integration, at least £111m from extra council tax revenue and £120m that goes directly to schools from St Andrew’s House.
The SNP minister said will provide a £240m boost to council “spending power”, adding: “This is a settlement which invests in education, invests in social care and invests in local services.”
Murdo Fraser, the Scottish Conservatives’ finance spokesman, said by not following the raising of the threshold for the higher rate of income tax, the SNP have made Scotland the highest tax part of the UK.
He said: “Mr Mackay has chosen to hike taxes on families and businesses, risking a choking of economic recovery.
“That will only deprive Scottish public services of vital tax revenue.”
Unite say they are “shocked and disappointed” by the cuts to councils in the settlement.
William McGonigle, regional officer at the union, said: “Despite having new powers over taxation, the Scottish Government continues to follow Westminster’s austerity road.”
