Holyrood debated the SNP's call for a freeze in tax

Holyrood voted by 65 to 56 to pass an amendment noting the "record levels" of finance provided to councils by the Scottish Executive.

It also highlighted the executive's commitment to consider "some further additional resources".

This would be subject to councils delivering on efficiency targets.

Rowdy debate

The Scottish National Party had called on ministers to allow local authorities to keep all of their efficiency savings so council tax levels could be held down.

In a rowdy debate in Holyrood, the SNP accused the Scottish Executive of heaping more duties on local councils but starving them of resources.

Councils backed the call for them to be allowed to keep �58.5m in savings.

However, the executive said council funding was at record levels.

The SNP said Scottish taxpayers have had to face an increase of 55% since 1997.

Regardless of where that funding comes from, we expect councils to deliver best value for the taxpayer and their communities George Lyon Deputy Finance Minister

Scottish councils have warned that householders face big council tax hikes, despite the fact that local government had made more than �120m in savings.

Nationalists also believe local authorities should receive �34.7m in additional money made available by the Treasury.

Finance spokesman John Swinney raised concerns that on the same day that the �120m figure came out, Cosla claimed a �400m black hole in local authority budgets.

He referred to a committee report which expressed concerns that to meet the 2.5% council tax target, the executive's spending target left a shortfall of �84.9m over and above the �58.5m efficiency savings target.

"Unless parliament takes action to press the government to close this gap, local authorities will face the familiar choice between cutting local authority services or once again increasing council tax levels beyond inflation," he said.

Cosla meetings

Deputy Finance Minister George Lyon said the level of funding this year going to local government accounted for more than one third of the executive's budget.

Mr Lyon said core funding in particular had risen since devolution by almost �2.6bn, increasing by 55% by 2007-08.

However, the minister said the executive would continue to provide local government with the resources it needed to provide services.

He added that the executive had additionally provided �30.8bn in support over three years.

I can't get the minister to tell us why it is if there's been a 55% increase in funding for local government that has had to be matched with a 55% increase in council tax David Davidson Tory finance spokesman

"Regardless of where that funding comes from, we expect councils to deliver best value for the taxpayer and their communities," he said.

Mr Lyon said it would be premature to anticipate the outcome of meetings between Finance Minister Tom McCabe and council umbrella group Cosla.

But he repeated the finance minister's comments that local authorities may receive additional funding if they show significant progress towards meeting efficiency targets.

Tory finance spokesman David Davidson said: "Obviously councils differ in their style, in their management and so on but they are broadly agreed about the difficulties that they face.

"What's more frustrating is that I can't get the minister to tell us why it is if there's been a 55% increase in funding for local government that has had to be matched with a 55% increase in council tax."

Mark Ballard warned of cuts in local services

The Greens' finance spokesman Mark Ballard said: "What will happen is we will see cuts in council services together with above inflationary increases in the council tax."

Socialist MSP Tommy Sheridan claimed councils faced a "double whammy" from an executive cutting council funds while demanding town halls remove more "waste" to help fund local services.

"We're not just talking here about a double whammy for local authorities, we're talking about a double whammy for Scottish citizens," he said.

Labour MSP Bristow Muldoon said: "It is unreasonable for any large organisation in the world to say they can not re-examine the way they deliver services."

John Swinburne, of the Scottish Senior Citizens Unity Party, hit out at the current council tax system, and said: "It would take some kind of twisted genius to devise a method of taxation worse than council."