SCOTLAND'S 250,000 local authority staff are in line for above-inflation pay rises in a deal which could shatter Gordon Brown's demand to limit public sector pay.
Council bosses who are currently negotiating the pay deals say they will not be bound by "edicts" from Westminster, and say instead they will base it on what councils can afford.
Their comments suggest unions will be successful in securing a deal
in excess of the 2.1% limit which the Prime Minister has attempted to impose across the public sector.
Any above-inflation deal for Scotland would lead to huge pressure on Brown to ensure a similar increase for English and Welsh council staff, and would puncture his plans to limit big rises elsewhere.
Formal talks between the unions and Scottish councils will begin at Cosla's Edinburgh headquarters later this month, with a final decision expected before last year's 2.5% pay deal expires on March 31.
The deal covers virtually all local authority staff, including bureaucrats, refuse collectors, street cleaners, leisure, library and care workers. Chief executives and craftsmen such as plumbers and joiners have separate pay deals.
Joe Di Paola, who is leading the talks with unions for the Convention of Scottish Local Authorities, said: "We will take a decision based on what councils can afford, what we have done for other groups of staff like teachers and the police, and stability in terms of making sure that services are delivered by a well-motivated workforce."
He added: "Although we would not want to fuel pay inflation, we're not going to do anything silly. Inflation is not the determining factor.
"No edict from either the UK or Scottish Governments can tell local authorities what they can or cannot pay. It's for our elected members to take a view on what is fair and affordable."
Douglas Black of Unison, who leads the unions' pay negotiations, said: "We are aware of the hurdles waiting for us but we are also well aware of the rough parameters within which Cosla is operating and what they can afford to offer.
"Our biggest concern is our low-paid workers. Any settlement must address their needs. If Cosla came back with an offer that's the same as the Government's pay policy of 1.9%, I don't think it would be going too far to say that our members would reject that.
"Gordon Brown can say what he likes, he doesn't work in a local authority."
Scottish councils this year received a real-terms increase of 2.5%, which puts an above-inflation pay settlement within budget.
The deal will ratchet up the pressure on the Prime Minister, who is fighting to maintain the Government's reputation for economic prudence.
Brown's insistence on a below-inflation pay ceiling among public sector workers has already been ignored by pay bodies in Scotland. Scottish teachers will see their salaries increase by more than 7% over the next three years, while police in Scotland received a 2.5% pay award in full, leading their counterparts in England and Wales to protest over a staggered increase that reduces the value to 1.9%.
Experts say private sector pay increases have a greater effect on inflation than public sector ones. But Brown's insistence on pay rises below the consumer price index inflation of 2.1% also reflects a desire to demonstrate control over the economy and the unions.
An above-inflation deal on Scottish council pay will make it more difficult for local authorities in England and Wales to contain the pay of their 1.6 million town hall staff. With a 1% real-terms increase in English council budgets, the employers have said they will take a "firm line" with the unions, who are calling for increases of up to 7%.
The TUC is hosting a meeting tomorrow where union leaders will discuss Brown's call last week for three-year public sector pay deals to replace existing one-year deals. The unions have given the scheme a cautious response, fearing pay restraint.
A report on MPs' pay, which is expected to recommend a 2.8% increase, will be published on Wednesday.
MPs from all parties have threatened to defy Brown's call for a 1.9% increase when they vote on their own salaries on January 24.
