INVERCLYDE Council bosses say they are counting the cost of a £2.3m Scottish Government funding cut.

The reduction in the local authority’s revenue grant — which pays for day-to-day spending — is less than what officials had expected but still leaves the local authority facing a £10m funding black hole over the next two years.

Officers had estimated a cut of around £4.6m ahead of Scottish finance secretary Derek Mackay’s draft budget announcement.

The reduction in revenue spending is half that figure but council leader Stephen McCabe warned that it does little to help with the ‘tough’ decisions which need to be made in the new year.

Councillor McCabe said: “While the proposed settlement is an improvement on what we were expecting it is still less money than we had last year.”

He added: “The council will have to fund the pay award along with other inflationary pressures.

“Combined with the ever-increasing demand for services from a tighter budget we will have no choice but to make cuts.”

In his budget, Mr Mackay said local authorities can make up the gap by increasing council tax next year.

He also announced almost £90m worth of additional cash for one-off capital projects.

There is extra money for the expansion of early years provision to 1,140 hours, although Inverclyde’s share of the national £243m funding has not yet been agreed.

Councillor McCabe said: “We have to confirm by the middle of January whether the council intends to accept the settlement but to quote the cabinet secretary’s own words - any local authority that does not will receive a revised and ‘inevitably less favourable offer’.

“Either way the challenges to balance the Inverclyde budget remain and our public consultation on the options available to us will proceed as planned in the new year.

“It will not be easy nor painless.”

A report on the implications of the funding settlement is being prepared and will be presented to a special meeting of Inverclyde Council on Thursday.