Local authorities are receiving enough Scottish Government cash to be able to freeze the council tax next year, MSPs heard today.

Local authorities are receiving enough Scottish Government cash to be able to freeze the council tax next year, MSPs heard today.

Finance secretary John Swinney told a Holyrood committee he believed councils should continue to freeze the tax.

And they might also benefit financially from falling inflation, he said.

He told Holyrood's Local Government Committee that councils had been allocated £70 million for last year's council tax freeze.

That money would have just £58 million if it had been calculated by applying the "GDP deflator" - a measure of inflation - on the basis that there was no increase in council tax.

"So there was a gain for local government in the position last year," said Mr Swinney.

He told Labour MSP Mary Mulligan he believed the same sum was sufficient to enable a freeze this year.

Asked by Ms Mulligan if he thought it was the right time to be asking councils to freeze the tax, he said: "Yes I do."

He went on: "There are pressures on public finances but equally there are pressures on household finances and business finances."

He cited last year's freeze and went on: "I hope with the support of Parliament in this process we can also secure a continuation and completion of that proposal to reduce business rates for some companies, remove them from others, and also to freeze council tax.

"We have to have an eye on the financial pressures households will be experiencing as a result of the wider economic circumstances."

He said the same figure of £70 million would be made available for next year, and said the previous £70 million had been "baselined".

Questioned by committee convener Duncan McNeil on whether he accepted councils were under funding pressure, Mr Swinney said the ""GDP deflator" applying throughout the current three-year financial period was 2.7%.

Inflation had risen to 5% but Mr Swinney said: "I don't for a moment believe that will be the inflation figure in 12 months times."

He went on: "I'm pretty certain that during the course of the spending review the level of inflation will be below the GDP deflator.

"The great advantage that local authorities have is that they have the ability to manage their own resources in the context of that position.

"For example, if inflation was to reach 1% at some stage during this spending review period, I would not be knocking on the door of Scottish local government to claw back resources."