The Scottish Government announced it will utilise the Scotland Reserve to give local authorities an extra £120 million next year in an attempt to avoid big increases in council tax bills.
An amendment will be brought forward during Stage 2 of the Budget Bill to allocate an additional £120 million to councils.
The funding represents the equivalent of a 4% council tax rise.
Finance Secretary Kate Forbes said that while councils have full flexibility in setting local council tax rates “there is no requirement for any inflation-busting increases in 2022-23.”
The money is being made available after the UK Government advised that the Scottish Government should anticipate further funding for 2021-22, funding which will be confirmed at the Spring Supplementary Estimates next month.
Speaking during the Stage One Budget Bill debate, Forbes said: “I am in no doubt about the important role local authorities play in our communities and in helping manage our ongoing response to the pandemic.
“I also understand the financial challenges they face.
“The 2022-23 Scottish Budget remains fully allocated and for weeks the UK Government has been telling us not to expect further funding.
“That has now suddenly changed and the UK Government has advised that we should anticipate further funding for 2021-22 which will be confirmed at the Spring Supplementary Estimates next month.
“Consequently I now have some new flexibility and am pleased to confirm my intention to utilise the Scotland Reserve to carry forward sufficient funding to allow me to allocate a further £120 million of resource to local government.
“Councils will have complete flexibility to allocate this additional funding as they wish in 2022-23.
“Councils asked for an additional £100 million to deal with particular pressures.
“We have heard them and listened and we are going to go further.
“This will allow them to deal with the most pressing issues they face.
“At a time when people are understandably worried about the cost of living, I would point out this increase in funding would be equivalent to a 4% increase in council tax next year, so whilst councils have full flexibility in setting local council tax rates, I do not believe that there is a requirement for any inflation-busting increases next year.”