Scotland's largest trade union has criticised the so-called "game-changing" fiscal powers for local councils, saying Kate Forbe's "package of financial flexibilities" has merely "kicked the can down the road."

It comes after Scottish Finance Secretary Kate Forbes announced new fiscal powers to councils in Scotland over their finances, to aid the recovery from Covid-19. 

It was announced that local authorities will be able to use capital receipts to relieve pressure on day to day spending, including those caused by the pandemic, as well being permitted to extend the repayment period for loans over the life of the asset the money was used to build, as opposed to the contractual period.

READ MORE: Coronavirus Scotland: Councils handed '£750m of funding and powers'

The Scottish Government has said the estimated value of the new powers is £600 million.

A lost income scheme also makes £90 million available to local authorities and £49 million open to trusts delivering services on behalf of councils, taking the total estimated value of the package to £750 million.

However, UNISON Scotland has stressed the "crisis" in local government finances "has not gone away."

Johanna Baxter, UNISON Scotland head of local government said she although she "welcomed" the announcement, the problem was not solved.

She said: "We welcome that the Scottish government has listened to our representations about the financial crises in local government. 

"But the announcement today does not solve the problem.  

"Much of this funding has already been announced and the package of support is only 'worth up to £750m' if local authorities use all the 'fiscal flexibilities' set out. 

"And all the fiscal flexibilities do is kick the can down the road.   

"It's like increasing the limit on your credit card - the debt is still there and will still have to be addressed.

She added: "We have already seen £2nb taken out of local government over the last decade.

"Coronavirus has caused a double whammy of extra demand for services and the substantial loss of income.

"Jobs and services remain at risk and while we welcome constructive discussions with the Scottish Government we need a long-term commitment to local government services."

Speaking earlier today, Finance Secretary Kate Forbes said: “I have been clear that the Scottish Government needs appropriate fiscal levers in order to respond effectively to the Covid-19 pandemic.

“That is equally true for local government, which is why I am very pleased that we have been able to deliver a package of support for local services worth up to £750 million.

“Working in partnership with Cosla, the Scottish Government has delivered on our commitment to support councils across Scotland with a game-changing package of financial flexibilities, giving them the powers they need to make informed decisions about spending at a local level.

“In addition, we are close to finalising the details of additional financial support through a lost income scheme, worth an estimated £90 million subject to confirmation of the funding from the UK Government. For trusts delivering services on behalf of councils this can also be topped up with £49 million of additional funding already confirmed.

“This support will help councils and their trusts manage the loss of income they are facing from local services due to Covid-19.

“These measures are excellent examples of how the Scottish Government is working together with Cosla and local authorities to ensure that we are doing everything within our power to save jobs, protect our public services and reboot our economy.”

Gail McGregor, the resources spokeswoman at Cosla, also welcomed the announcement.

She added: “Responding to Covid-19 whilst continuing to deliver essential, everyday services has put extreme pressure on local government finances this year.

“The pandemic has also meant substantial losses of income across a range of council services including leisure, sport, culture, and planning.

“Balancing budgets will be a real challenge and this has been fully recognised by Scottish Government who we have worked with constructively and positively.”

The package was created in consultation with Cosla, the body which represents local authorities in Scotland.

The powers provided to councils by the Scottish Government are similar to those demanded by Ms Forbes from Westminster.