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Councils will have to find £150million within shrinking budgets to match the SNP’s promise to lift the public sector pay cap.

The estimate was produced yesterday by independent analysts at the Scottish Parliament as the dust settled on last Thursday’s Holyrood draft budget.

It sparked another row over funding for vital frontline services.

(Image: Getty Images Europe)

Councils had already warned the budget amounts to a £153million cut even before the new pay burden.

In his spending plans, SNP Finance Secretary Derek Mackay announced the pay cap would lift to a maximum of three per cent. It applies directly to public bodies such as the NHS but not to councils as they have their own pay policies.

Mackay’s plans will, however, be seen as a green light for unions desperate to get a better deal for local authority workers.

A spokesman for the Convention of Scottish Local Authorities said: “This chimes with what we said on Thursday following the budget statement – the reality is that this is not a flat cash revenue settlement for local government.”

The Scottish Greens have put the price of their support for the budget at about £150million – which would all but wipe out the cut but not deal with pay pressures.

Scottish Labour finance spokesman James Kelly said: “These cuts will end up falling the hardest on the poorest, the most vulnerable and our children.

(Image: PA)

“These are more than numbers on a spreadsheet – these are our schools, social care services, local housing and community centres.”

Mackay’s budget was the first since devolution to include changes to tax bands – but cash-strapped local authorities could wipe out

any benefits for lower earners as they are able to push council tax

up by a maximum three per cent.

(Image: PA)

Tory finance spokesman Murdo Fraser said: “As usual, Derek Mackay is giving with one hand while taking away with the other.”