John Swinney has refused to hand over £145m of funding to councils in the deepening row over teacher numbers. In a letter obtained by the Daily Record, the First Minister linked the dispute to upcoming Budget negotiations.

Town halls and the Government are at loggerheads over the decision to withhold the £145.5m from local authorities.

Ministers have linked the funding to councils agreeing to protect teacher numbers. But council umbrella group COSLA says they need flexibility over teacher levels and claims protecting them could lead to deep cuts elsewhere.

COSLA President Shona Morrison appealed directly to Swinney in a letter earlier this month to provide them with the £145.5m. She also said they had lodged a dispute under a joint working agreement with the Government.

She wrote: “COSLA does not support the requirement to maintain teacher numbers at a level set by Scottish Government.

“Workforce decisions should be taken at a local level, dependent on local needs and circumstances. Councils rightly have high ambitions for all learners in Scotland and recognise the vital role of teachers and other professionals within that.

“However measuring teacher numbers does not tell us anything about outcomes for children and young people, which is where our attention should be focused.

She added: “Ringfencing spending on teachers forces even deeper cuts on services like additional support needs, social work support, early intervention services, cultural services, youth work and libraries, all of which are vital to supporting children and young people, improving attainment and closing the poverty related attainment gap.”

In his response, which he sent last week, Swinney did not give an inch on the teacher funding row. He also repeated his Government’s opposition to any move by councils to cut ‘learning hours’ for pupils: “I do not think we should be focusing on creating and managing a dispute resolution procedure and should instead be targeting our efforts on working together and putting our energies into resolving challenges which will support delivery of our shared priorities.”

Swinney added: “There is a need to make rapid progress towards delivering on the priorities that matter to people and communities, and I have asked that discussions to agree these are aligned to the upcoming budget negotiations. I have indicated my willingness to be involved in a discussion once the conversations led by the Cabinet Secretary for Finance and Local Government have made progress towards an agreed outcome.”

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