Council leaders have warned of a funding crisis despite a last-minute announcement to hand back £160m to local authorities.

Scottish finance secretary Derek Mackay said councils would receive £160m more than previously thought.

The figure includes £30m for capital investment and the finance secretary said it could ‘be spent at the discretion of individual authorities’.

Mr Mackay said: 'The budget provides a strong settlement for local government, including additional funding for educational attainment, increased capital resources and increased revenues from council tax.'

COSLA president, Cllr David O’Neill said he was pleased the Scottish Government has changed some of the budget details, but warned councils are still facing a funding reduction of around £200m.

‘Whilst I absolutely welcome the reduction in the cut, the simple truth is that there remains nearly £200m of a cut to local public services and this is still not a good result, better but not good,’ said Cllr O’Neill.

The finance spokesman for the SLGP, Cllr Willie Young, said: ‘In spite of this climb down, local authorities still face a funding crisis of epic proportions with frontline services remaining under threat.’