Group leader Bruce Mackie and finance spokesman Neil Powrie said Chancellor Gordon Brown announced an extra £340m to help keep last year’s council tax increases in England down. In terms of the Barnett formula, Scotland received £47m for 2004/05 as a result of Mr Brown’s announcement. However, the Executive decided council tax rises were not such a pressing matter in Scotland and the money was not made available, being put into the Efficient Government Fund instead.

“The city council’s share of the additional funding would have been around £1.4m,” Mr Mackie said.

“If that had been used for council tax purposes then the council could have set the Band D charge £30 lower last year.”

He said additional funding has also been made available for the coming financial year which would give Dundee an extra £375,000 – around £8 at Band D.

“If the Executive had passed on all the funding to the council tax payers, Dundee’s council tax could be £38 less than it is at the moment,” Mr Powrie said.

“The Conservative group are asking for this money to be made available to councils because we believe it is wrong for the Scottish Executive to withhold this vital financial lifeline.

Moral duty

“Legally, the Executive are not obliged to hand over the money to local authorities, but we are saying they have a moral duty to do so because that is why it was made available by the Chancellor.”

Mr Mackie said the extra cash was particularly necessary in Dundee’s case because the method of determining the local government financial settlement was “seriously flawed” and was working against the city.