SCOTLAND’S group of Labour-led “rebel councils” is to commission a leading economic thinktank to carry out an investigation into cuts to local government budgets.

Branding the Scottish Government’s formula for allocating council cash as “not fit for purpose”, the Scottish Local Government Partnership (SLGP) will appoint analysts to review how funds are distributed in the face of an expected raft of new cuts.

It is understood the SLGP, which includes Aberdeen, Glasgow, South Lanarkshire and Renfrew-shire councils, will announce the Fraser of Allander Institute as their selected analysts later this week.

It will publish the document ahead of the Government’s 2017-18 Budget later this year and investigate what councils have done to try and mitigate the cuts and the impact to services.

SLGP convener Jenny Laing said: “We need to lift the lid on the reality of the Government’s funding cuts.

“They have thrown local authority spending plans into chaos and the funding formula is no longer fit for purpose.

“The future of local government finances have never looked so bleak and we hope this report will force Nicola Sturgeon to re-examine the way funds are currently distributed and make her realise that while these cuts continue wholesale reform of the current system is essential.”

The SLGP was formed 18 months ago after the four member councils split for local government umbrella organisation Cosla.

The report will also look at the impact of existing spending commitments, such as PPP repayments, and how the financial situations of local authorities is potentially being made worse by having to deliver the SNP’s explicit policy pledges.

Ms Laing, who is also the leader of Aberdeen City Council, added: “The entire process has been made far worse because of the way in which funds are handed out.

“Councils have man- aged to make efficiency savings in a number of areas but there is a limit to what can be achieved through changes to man-agement structures, back-office functions, rationalisation of assets and service restructuring.”