Shona Robison said there is no need for big council tax rises next year as she announced a “record” funding deal for local authorities.

The Finance Secretary said a £1bn increase takes funding to £15bn for councils to provide services.

In her draft budget she also revealed changes to the thresholds for the lower income tax bands and cash she said would help deal with the housing emergency.

Robison confirmed the winter fuel payments next winter and also said the Scottish Government would mitigate the two-child tax credit cap in Scotland in 2026.

(Image: PA)

There will be no council tax freeze or cap imposed by the Scottish Government but she said large increases are not necessary.

On council funding, she said: "While it will be for councils to make their own decisions, with record funding there is no reason for big increases in council tax next year."

The settlement also provides cash for pay increases already agreed for teachers, social care workers and bin workers.

On housing, she said: “There are too many families in temporary accommodation” and added that funding would be “ramped up”.

Robison said there will be £768 million to provide 8,000 more affordable homes and £4m for homeless prevention projects.

In Glasgow, at the last count, there were 8195 people living in temporary accommodation in November, including 3252 children.

Campaigners welcomed the investment.

Maeve McGoldrick, head of policy for Crisis in Scotland, said: “Investment in truly affordable housing for those on the lowest incomes is one of the most effective ways to prevent homelessness.”

On tax, the Finance Secretary said 60% of people in Scotland would be better off.

She proposed to raise the thresholds for the starter and basic rates by 3.5% to £15,397 and £27,491 respectively.

The Higher, Advanced, and Top-rate thresholds will be maintained at £43,662, £75,000 and £125,140 respectively.

Robison added: “I have decided to provide tax support for low and medium-income earners.

“That means more of people’s money will be taxed at the starter and basic rates.

“It also means that the majority of taxpayers in Scotland will continue to pay less income tax than in the rest of the UK.

“This will remain true until at least the end of this Parliament while, as with the UK, thresholds for Higher, Advanced and Top rates will be maintained at their current levels.”

She said the Scottish Government will mitigate the two-child tax credit cap, ending the policy in Scotland.

Robison said the Scottish Government was waiting for the Labour UK Government to act. But said: “It hasn’t delivered”.

She said: “This government is ending the two-child cap, lifting 15,000 children out of poverty.

Anti-poverty groups welcomed the move.

Peter Kelly, Poverty Alliance chief executive, said: “The two-child limit is a huge injustice that has no place in a compassionate society – because every child matters and every child should get the support they need.” 

Other however were less enthusiatic.

Mary Glasgow, chief executive at Children First, said:  “The Cabinet Secretary says this budget will lift children out of poverty but given that Scotland faces a childhood emergency it is difficult to see how. 

“The promise of jam tomorrow, in the form of mitigating the UK two-child cap does nothing to alleviate the plight of thousands of children and families across Scotland who are going hungry today." 

The budget needs the support of at least one other party at Holyrood, in a final vote next year.

Robison said: “This Budget invests in public services, lifts children out of poverty, acts in the face of the climate emergency, and supports jobs and economic growth.

“It is a budget filled with hope for Scotland’s future and I look forward to working with all parties in Parliament to secure agreement around its provisions.”

Opposition parties said it was a disappointment and said there were cuts hidden in the detail.

(Image: PA)

Pam Duncan-Glancy, Labour MSP for Glasgow, said: “Public services are on their knees after 17 years of this government – and my constituents in Glasgow are paying the price of SNP incompetence.

“With a housing emergency declared, cuts to education provision imposed and patients unable to access timely healthcare, talk of record funding would ordinarily be welcomed.

“However, much of this appears to be SNP spin, with real-terms cuts to Local Government funding for health and social care, homelessness prevention, and school counselling hidden behind the headlines.”

The budget document shows the homeless prevention fund remains static at £30.5m.

Free school meal intervention increases from £22m to £37m but there is no money for the expansion of free school meals, last year it was £40m.

The proposed Scottish income tax rates for next year are

Starter rate £12,571 - £15397 =19%

Basic rate  £15,398 - £27491  = 20%

Intermediate rate £27 - £43,662 = 21%

Higher rate £43,663 - £75,000  =42%

Advanced rate £75,001 - £125,140 = 45%

Top Rate above £125,140 = 48%