SAVINGS of nearly £2 million will be required to help balance the books at Inverclyde Council because of claimed 'hidden cuts' in the Scottish Government budget.

Local authority leader Stephen McCabe today bemoaned the settlement from Holyrood announced on Thursday.

The government announced that funding for councils across the country will increase by £495m from April compared with last year.

But council umbrella group Cosla claims there will actually be £95m less to spend because the vast majority of the additional cash is 'ring-fenced' for specific purposes, such as education and social care.

Councillor McCabe says Inverclyde will be left with a deficit of £1.8m over the next 12 months in its revenue budget, which pays for day-to-day running costs.

Mr McCabe, who is charge of the Labour-led administration, said: "While the budget announcement claims to deliver an increase to councils, there are hidden cuts in there to core council budgets.

"We need to look at the detail, but on the face of it, councils' core capital budgets are reduced across Scotland with Inverclyde's reduction nearly £1.8m and there are significant cash reductions across Scotland.

"The claimed increase in revenue funding is masked by increased ring-fencing of budgets for health and social care and more spending on government priorities including early years commitments.

"While many of these investments are very worthy, the simple fact is that the call from local government was to invest in core budgets to allow councils to make local choices for their local communities and that call appears to have been ignored."

But Inverclyde opposition leader and SNP councillor Chris McEleny defended the funding package from his party's government.

Mr McEleny said: "Exact localised numbers are still to be analysed but the early indications are of a better than expected settlement.

"However, naturally this won't stop further engagement for further funding on specific projects that can be identified to tackle deprivation.

"The budget provides a settlement that will support vital council services and other important public services in Inverclyde.

"I'm particularly pleased that the settlement will deliver on the SNP's key commitment to expand the funded hours of early learning and childcare this year, funds a fair pay deal for Inverclyde's school teachers, and will invest over £2m of targeted funding at closing the attainment gap through the Pupil Equity Fund.

"This increased settlement will ensure a fair funding deal for Inverclyde."

Thursday's budget at Holyrood was delivered by public finance minister Kate Forbes in the absence of finance secretary and Kilmacolm MSP Derek Mackay, who was forced to resign just hours earlier over a scandal involving inappropriate messages sent by him to a 16-year-old boy.

Ms Forbes announced that local authorities will be allowed to raise council tax by a maximum of three per cent.

That would raise an additional £1m in Inverclyde, but it is understood that residents and some elected representatives are not keen on another big increase following large hikes at local and national level over the last few years.

Officials and councillors on the cross-party budget working group have identified over £400,000 worth of savings with 'minimal impact' that could be made over the next 12 months.

The government's tax and spending proposals will now be scrutinised by parliament - and could change before the budget has to be finalised on March 5.

In Inverclyde, councillors will meet on February 20 to set the rate of council tax, with the local budget to be decided at a meeting on March 12.