THE umbrella group for councils is boycotting talks with the Scottish Government in protest at plans to centralise the funding of education.

In a sign of escalating tensions, the Convention of Scottish Local Authorities (COSLA) has withdrawn cooperation with Ministers over proposals to divert £100m to schools, by-passing their member councils.

Thirty-two councils fund schools through a central government grant, but Cabinet Secretary John Swinney's plan to fund education directly is, they believe, intended to weaken the role of local authorities.

Council tax bills for those living in the most expensive homes will next rise year, but the proceeds will be deducted from the local government settlement by Ministers.

The £100m will be dispersed by the administration in Edinburgh, not councils, to schools deemed to be most in need.

However, the policy will effectively mean tax proceeds in one part of the country being used elsewhere, with Aberdeenshire and Edinburgh being among the biggest losers.

Critics of the policy believe it breaks the link between taxation and local accountability and is part of a centralising agenda.

In August, COSLA president David O’Neill said: “The Scottish Government will destroy that link with their plans to use council tax money for a national policy. Let's be clear – this does mean that money raised in one community will be spent in another.”

It can be revealed that COSLA's political leaders recently decided to end all discussions with the Government on the distribution mechanism. In practice, the ban means a halt on meetings with civil servants and Ministers on the Government’s flagship education initiative.

MSPs have backed the council tax increase, but with caveats about the direction of local government finance.

Local government sources believe the plan is part of a multi-headed approach by the SNP Government to strip councils of their powers and the ban marks a new low in relations.

The SNP manifesto for the Holyrood election promised a review of the “roles and responsibilities” of councils and a reduction in the number of local authorities has not been ruled out.

A high-profile announcement by the First Ministers at the SNP conference on childcare would also take power away from councils and give it to parents.

On Friday, it was reported that responsibility for roads could be transferred to Transport Scotland, while mergers of council departments in other areas are believed to be on the table.

A COSLA spokesperson said: “Council Leaders, at the September meeting, expressed disappointment that there had been no movement on the part of Scottish Government to COSLA’s key concerns around the removal of the link between local taxation and local service provision via the £100m attainment challenge funding and that COSLA remained totally opposed to this principle. Therefore, yes this is a factual position and a COSLA position.

“In a nutshell they are angry that local taxation is being used for a national policy and that funding that is raised in one area could be spent in another.”

A Scottish Government spokesman said: “The Government remains committed to engaging COSLA in further dialogue on a range of issues, including the question of the treatment of the additional £100 million which is to be made available to improve educational attainment in each of the next five years. We would encourage COSLA to reconsider and actively participate in these discussions.”