John Swinney says councils should match the extra £140m pledged by the government to avert strikes.
He said: "I have listened and I announced an extra £140m of new money to go into local government on a recurring basis to support a higher pay award for members of staff.
"Some have budgeted on 3% and have offered 2%. I have put £140m on table which puts the offer even higher," he said.He added that councils had to look at "every possible area of finance" including reserves and other funding streams to put together an improved offer.by the UK government and that within that budget, councils were given a "strong financial settlement".
It comes a day after the Scottish government announced an emergency budget review for Scotland in response to the growing cost of living crisis.
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