SCOTTISH Ministers are planning to fund their £100m cash injection into schools by clawing back money raised in council tax increases and redistributing the resources across the country.

In an unprecedented move, revenues from local tax rises by a council such as Edinburgh could be used by the Government to pay for education improvements in Glasgow.

A leaked paper by local authority umbrella group COSLA also revealed there is no agreement on a council tax rise that is central to the policy.

First Minister Nicola Sturgeon has said repeatedly that closing the educational attainment gap is her top priority in office. Her education policy has various strands: national standardised testing; empowering teachers; and directing extra resources to schools.

On the funding side, the Scottish Government wants the council tax to rise from April next year for expensive homes in bands E-H. Although councils deliver the education service, Sturgeon wants the £100m raised to go straight to struggling schools and bypass local authorities.

Concerns were expressed that the policy could result in schools in wealthier local authority areas benefiting the most. If councils held on to their own share of the £100m raised, areas with a large number of bigger properties would inevitably command more resources.

However, the Government is considering a new mechanism that could be seen as turning the principle of local government on its head. Discussions are under way about councils raising the extra resources from homes in bands E-H, only for the £100m to be controlled by the Government and given directly to struggling schools – a plan that one SNP source said "would be largely seen as a positive move".

However, Labour MSP Iain Gray described the plans as an “affront” to local democracy and an “outrageous” raid on councils.

The COSLA leaked paper states: “There has been no agreement between Scottish Government and COSLA on the proposal to increase council tax for bands E-H. Technically, the Scottish Government will be requesting that councils raise local taxation and then redistribute the monies collected on a national basis, losing the link between local taxation and the community.”

It is understood that one favoured option for implementing the policy is for councils to hold on to the resources raised, but face a £100m reduction in their central government grant.

A senior council insider said local authorities would have two major objections to any such proposal. The first is the principle of central government effectively siphoning off resources that were raised on a local basis.

The second issue, according to the source, is the “chipping away” at the ability of local authorities to spend their own money.

It would also mean a local tax – set by councils with their own mandate – being used as a means of nationwide redistribution.

Independent research revealed that Edinburgh city council would raise around £15.6m of the £100m – the largest contribution of any local authority.

However, if this cash was used nationally, Edinburgh would likely receive a lot less than its local taxpayers had paid in.

Asked at Holyrood by Labour MSP Daniel Johnson about the mechanism for redistributing the £100m, Education Secretary John Swinney said recently: “That will, essentially, be the subject of discussion with local authorities.”

The leaked COSLA paper also criticised the Government’s preferred method of targeting resources at schools, namely free school meals eligibility: “The use of ‘Free School Meals’ eligibility on its own is a poor indicator and there is no evidence that this will ensure that those children who most need support will receive it.”

The paper also flagged up “significant concerns” about Government plans to make schools, along with councils, legally responsible for education.

On the totality of the Government’s schools agenda, the COSLA document stated: “Elements of the Delivery Plan signal an undermining of the existing role of local government in its responsibility for providing education for children and young people.”

A Scottish Government spokesperson said: “Our reforms to Council Tax will raise an additional £100 million to close the attainment gap, protect household incomes and make local taxation fairer. The reforms will ensure local authorities continue to be properly funded while giving them more accountability as they will have the discretion to increase tax by up to three per cent.”

A spokesman for COSLA said there would be a meeting of stakeholders this week on the Government’s education plans and the umbrella group would comment afterwards.

Gray added: “This is an outrageous raid on local councils. The SNP have cut education budgets year on year and refuse to use the parliament’s powers to protect school budgets.

“Their cunning plan is to force councils to raise council tax instead, then snatch the extra money from them so they can spend it. Presumably they expect councils to get the blame while they take the credit. It is an affront to local democracy. The SNP should invest more in our schools but they should have the guts to raise the money with their own parliamentary powers.”

Willie Rennie, the Scottish Liberal Democrat leader, said: "On council tax it is just one headache after another for the SNP, and in the meantime Scotland's young people are missing out on the skills and education they need.

"By giving with one hand and taking away with the other like this Nicola Sturgoen is pulling the wool over the publics eyes. She promised 'additional' money, and nothing else will give our schools what they need.

"Liberal Democrats want Scotland's education to be the best in the world again. That is why we are committed to a penny on income tax to raise £500 million for our kids' future."