SNP activists have sent the party leadership a stark message for councils to be given more freedom over Scottish Government funding after the party’s conference delegates called for authorities to be allowed “local flexibilities” amid concern over budgets being ring-fenced.

A motion calling for "full and transparent" council funding, put forward to the party’s conference by SNP leader of Edinburgh City Council, Adam McVey, was overwhelmingly approved by delegates - which he labelled “one of the thornier issues” facing the party.

The prominent SNP councillor criticised the current funding model for councils, warning it “relies too heavily” on yearly budgets from the Scottish Government.

Mr McVey’s motion acknowledged “new government initiatives” that SNP ministers pass over to councils to roll out such as the expansion of free childcare, warning that “for these policies to be fully funded, this must be in addition to the core budget of Scottish councils”.

The Scottish Government has received persistent criticism from Cosla, the umbrella group for Scottish councils, and opposition parties over not enough funding being given to councils and a warning that new SNP priorities are taking funding away from authorities’ core budgets.

The SNP-Greens government is currently embroiled in a stand-off with Cosla over plans to set up a National Care Service, with council leaders raising fears over the centralisation taking funding and responsibility away from local  authorities.

Mr McVey is regularly put under pressure by his Labour coalition partners in Edinburgh over a lack of funding for councils.

In addressing SNP delegates, Mr McVey pointed to policies “making a really positive difference”, but warned that “despite all the positives of those programmes and that funding delivered in partnership to be welcomed, there is still a residual issue with local government finance”.

The council leader pointed to the recommendations of the Christie Commission 10 years ago which called for policies “to make local government finance accountable and transparent”.

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Mr McVey added: “The current funding model relies too heavily on annualised Scottish budgets, decisions which can make a seismic impact on councils’ ability to invest in our local communities.

“No-one will pretend that there is a silver bullet to this. The 2015 commission on local tax made that absolutely clear. Finding an approach that is accountable, progressive, that delivers the funding that communities need will be difficult.

“But by continuing the discussion and working together, we can get to a firm position and set out a clear way ahead.”

He said: “This motion isn’t aiming to change any of that collaboration. What it is doing is trying to lean into one of the thornier issues facing us - that of local government finance.

“We need to do more to connect the link between revenue and expenditure, to help improve accountability, to give councils a more permissive environment where revenues can better reflect their economies and so they can better invest in our communities.”

Mr McVey, in highlighting the need for councils to be given more flexible funding, pointed to the SNP’s stalled plans to introduce a tourist tax, which he claimed “could raise up to £14 million a year for Edinburgh”.

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The policy would “help to pay for local services” and “help us manage the hugely successful tourist economy”, Mr McVey added.

He said: “I’m hugely grateful to the Scottish Government for agreeing to progress this, albeit it’s been delayed though Covid.

“The question is, should it take so much effort and so many years to deliver policies like this? My conclusion, conference, is that no, we should build a more permissive environment so that councils can take decisions for their economies and for their circumstances that’s right for them.”

A Cosla spokesperson said:  “Local Government needs absolute flexibility to manage funding locally and to respond to need, rather than be pressed into areas of specific spend or to be limited to using funding by an artificial deadline or within a financial year. 

"Councils also need longer term assurances on funding, instead of limping from year to year with the ongoing threat of cuts “

Earlier, South of Scotland councillor and vice convener of the Association of Nationalist Councillors (ANC), Heather Anderson, told party delegates that next year’s council elections were key – warning “we need to win and we need to win big”.

READ MORE: National Care Service: Cosla demands SNP answers over widening scope of plans

She added: “Where we’re in administration we’re in minority or coalition and that needs to change.

“We need to take control of more councils by winning more seats, making more deals with other parties and securing majority control of the Convention of Scottish Local Authorities (Cosla).

“Colsa needs to be with us to ensure we implement the policies in this programme for central and local government. Cosla needs to be with us if we are to hold and win a referendum. We don’t want to be arguing about the use of village halls for voting when we should be focusing on the big policy issues.

“Every councillor knows exactly how crucial it is we win big next May - we can’t let anything slip. The First Minister knows that any loss of control will be used against us but that every gain builds our case for independence.”

Next year’s council elections were one of three themes for the SNP conference, alongside independence and climate change. But in her keynote conference speech, Nicola Sturgeon failed to mention the elections.