All 32 of Scotland’s local authorities have agreed to a funding arrangement from the Scottish Government worth £10.3 billion, though many have warned of the need to cut services and jobs to make the deal work.

Finance secretary John Swinney welcomed the settlement which will mean the council tax freeze continuing for a ninth year. He said householders, workers, healthcare and schools will all benefit from the funding package for 2016-17, which will:

The news follows lengthy discussions between the Scottish Government and local government body COSLA, which resulted in ministers agreeing to extend the deadline for councils to examine the proposal.

Council leaders warned services will have to be cut as they reluctantly agreed to the deal.

Stirling Council’s Labour leader Johanna Boyd said she had agreed to financial settlement “under duress”, adding it would have a “significantly negative impact” on the local community.

South Ayrshire Council leader Bill McIntosh, a Conservative, also criticised the SNP administration, saying: “Councils have been placed in an impossible position by the Scottish Government and it’s only because the alternative would make our financial position even more untenable that we have accepted this settlement.”

Mr McIntosh said South Ayrshire Council would now “have to take the kind of decisions we have purposely worked hard to avoid until now - stopping services, reducing services, or delivering services in a very different way”.

COSLA said the deal represents a £350m funding cut which will hit local services. Some local authorities had considered breaking the council tax freeze but would have faced the prospect of financial sanctions as a result.

The settlement includes £70m to again continue the council tax freeze and ease the burden on stretched household budgets.

A total of £88m is included in the settlement to ensure schoolchildren continue to receive the same amount of teacher time by ensuring that councils maintain the number of teachers to pupils at current levels, including the induction of new teaching staff to replace those leaving the profession.

Mr Swinney said: “I welcome the agreement of Scotland’s local authorities to this financial settlement which, when taken together as a package of funding, will enable them to increase the pace of reform and improve essential public services to communities all over the country.

“The Scottish Government was elected on a promise to freeze the Council Tax while we consider ways to replace it with a fairer system. That is the correct approach to take to provide support to household incomes in these challenging financial times.

“My priority all along has been to deliver a financial settlement that councils can accept in order that we can pursue our shared priorities to improve outcomes for local people through health and social care integration and by improving educational attainment.”