Humza Yousaf is facing a bruising public fight with local government leaders after they were offered half of what experts say is needed to freeze council tax next year.

SNP finance secretary Shona Robison today said she had set aside £144million, the equivalent of a 5% rise, to freeze the annual levy in 2024/25.

However economists at the Fraser of Allander Institute at Strathclyde University had calculated the true cost of a “fully funded” freeze would be more than £300m.

This is because then Mr Yousaf announced the freeze at the SNP conference in October, he also cancelled a planned rise for Band E to H houses worth £180m to councils.

The SNP-led council umbrella body Cosla is due to discuss the offer on Thursday.

One senior source said the £144m was “very much at the low end of expectations”, and predicted weeks of wrangling as the budget advanced through Holyrood in the New Year.

Delivering the first budget of Mr Yousaf’s leadership, Ms Robison insisted the council tax freeze was fully funded, and was more than the inflation forecast of 3%..

She said: “I could fund an inflation proof 3% Council Tax freeze. But I want to help support services, so I will go further than that.

“That’s why I will fund an above-inflation 5% council tax freeze - delivering over £140m of additional investment for local services.

“Combined with the other support being provided to local government, this will increase their overall funding by 6% since the last budget, taking local government funding to a new record high of over £14bn, helping household budgets during tough times and supporting our local authorities to deliver services.”

But Joao Sousa, Deputy Director of the Fraser of Allander Institute, said: “The Scottish Government continued to claim it was 'fully funding' the freeze in rates for next year, and allocated £140m on the basis of a 5% increase. 

“While this is about right for an average 5% increase in rates, some councils would have been planning on increasing rates by more than 5%, and are unlikely to receive compensation for that. 

“And it also excludes compensation for the planned increase in multipliers for higher band properties, which was consulted on over the summer and many Councils would have assumed in their planning, and which would have required an additional £180m.”

Tory MPS Liz Smith said: “If the Scottish economy had grown at the same rate as the UK economy, instead of being downgraded because of SNP mismanagement, ministers would have had billions more to play with – just as they would had they not squandered a fortune on failed projects.

“SNP incompetence means Shona Robison has been forced to short-change key public services. 

“When you remove the Scottish Government’s partial funding of the council tax freeze, the local government budget has again been cut – as have many others, including those for housing, rural affairs, trains, ferries, mental health and tackling alcohol and drugs.”

Jonathan Carr-West, Chief Executive of the Local Government Information Unit in Scotland, said:  “With one in four Scottish councils warning that they may be unable to balance their books next year, today’s budget will not offer much reassurance.

"A council tax freeze funded as though council tax were increased by 5% is equivalent to the rises that councils were planning for this year, but it denies them the increase in their tax base and thus undermines their finances next year and for years to come.

"The council tax freeze this year will not help residents affected by councils’ inevitable spending cuts and it will not help residents next year, when councils’ spending power is reduced further because their council tax base can’t increase in line with the amount they need.  

"For the average resident, this means their life will get more expensive and their services will get worse."

A Cosla spokesperson said: “Given the significance of the Scottish Budget to councils and communities across Scotland, Cosla officers are currently working through the detail of the figures, in order that a briefing can be prepared for leaders, who will give it full consideration on Thursday morning at a special meeting.”