DEREK Mackay has been accused of keeping aside a “slush fund” of extra cash to smooth over Scottish Budget negotiations.

The Finance Secretary was quizzed by MSPs over an extra £110 million which helped get the SNP’s spending plans through Parliament.

Ministers committed to handing councils £170 million more after striking a deal with the Greens, who wanted further support for local government.

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While some of the extra cash came from increasing taxes, Mr Mackay told Holyrood’s finance committee that money had also come from previous Budget underspends and Scotland’s cash reserves.

Accused by Scottish Labour MSP James Kelly of setting aside “a kind of slush fund for your negotiations”, he said: “I wouldn’t describe it as that, Mr Kelly. You can term it any way you want.”

He added: “If you want to be fully transparent, I don’t think it’s a bad thing to set out what that underspend might be and how the Government proposes to use it.

“And in fact, if it’s using it in a way that’s agreeing parliamentary support – I actually think that’s quite a good thing. And I’m sure Mr Kelly would welcome that.

“And I think it’s far more credible than the plans I’ve seen from the opposition Labour party on how to fund a budget.

“I think it’s a very prudent, wise and transparent use of resource.”

The row comes after the Scottish Fiscal Commission estimated the last-minute Budget deal between the SNP and Greens had secured £62 million more for the public purse.

It said the Government’s final income tax policy will raise an expected £219m next financial year – £55m than under December’s draft budget.

Changes ushered in as part of the Budget will see Scotland move to a five-band income tax system, adding a 19p "starter" rate and 1p to the higher and additional rates.