Scotland’s Government is under pressure to reverse planned council budget cuts after MSPs warned ministers created an ‘expectation’ town hall staff would receive pay hikes.

Holyrood’s local government committee today reported that ministers may have given local government staff hope that they will receive the same 3% pay rise this year that lower-earning central government staff have been promised.

Scotland’s finance minister, Derek Mackay, announced an end to the 1% public sector pay cap in his most recent budget – promising those earning less than £30,000 a 3% increase this year.

But the deal does not cover Scotland’s local authorities, which are instead facing budget cuts of £157m this year.

Despite this, the Scottish Government’s pay policy still states that it should ‘act as a benchmark’ for all major public sector workers.

Consequently, the committee of MSPs reported: ‘The outcome of the Scottish Government’s public sector pay policy creates an expectation as to what local government workers might receive.’

The Convention of Scottish Local Authorities (COSLA) warned that funding a 3% pay increase across local government at a time when most councils were managing budget cuts would create ‘significant pressure’.

Co-leader of the Scottish Green Party, Patrick Harvie, said he would push the SNP government to spare extra cash for councils.

He said: ‘The Government has to reverse the proposal for a £157m of cuts to local government and, on top of that, make a fair contribution to the extra cost that local government will have to meet if they are going to have a pay policy that’s remotely acceptable to unions.’