Major council tax reforms will be set out by Nicola Sturgeon today, with authorities likely to receive more locally raised income.
Sources close to the first minister said the overhaul would be “significant” with longer-term changes expected, including councils being assigned a share of their income tax revenues.
SNP ministers – who will encourage local authorities to plough any extra cash into education – claim this would give councils the opportunity to boost economic growth in the face of budget cuts passed down from Holyrood.
Ms Sturgeon said: “Over nine years, the council tax freeze put in place by this government has helped to keep bills affordable during difficult economic times while ensuring councils are properly funded to provide public services.”
The cross-party Commission on Local Tax Reform, set up by the Scottish Government, concluded that council tax could not be overhauled to make it truly progressive. It is likely, however, that the SNP will significantly reform the current system rather than scrapping it.
Meanwhile, a new delivery agency is to be set up to administer welfare payments worth £2.7billion when they are devolved to Scotland.
Social Justice Secretary Alex Neil confirmed there will be a phased transition of the administration of powers over the next few years.
He said: “It will be underpinned by our commitment to principles that will treat people with dignity and respect. We want to take a fairer approach to social security that tackles inequalities.”
Conservative MSP John Lamont raised concerns about the level of preparation for delivering the new benefits.
He added: “It’s crucial that the cabinet secretary now sets out to the Scottish taxpayer some concrete proposals for the delivery of these powers and how it intends to pay for any possible divergence from the policies of the UK Government.”
Scottish Labour opportunity spokesman Iain Gray highlighted a new report by the Institute of Fiscal Studies states child poverty rates are expected to rise between 2015/16 and 2020/21.
He said: “With new powers over tax and social security coming to Scotland we must now take action to stop (child poverty).”