Funding used to break the deadlock in council staff pay talks will have to be cut from elsewhere in the Scottish Government’s budget, Nicola Sturgeon said, as she hinted at “really tough decisions” to be made as a result of the cost-of-living crisis.

Unions agreed to suspend planned strike action in non-teaching education roles and waste services in councils across Scotland after a new offer was made.

Unison’s Johanna Baxter said the new deal, which was made on Friday to Unison, Unite and GMB, pushed the overall pay envelope to £600 million, despite assertions by the First Minister previously that there would be no extra funding forthcoming.

Ms Sturgeon chaired marathon talks on Thursday, which resulted in the new offer.

Speaking after the suspension of the strikes, a result she said she was “very pleased” about, the First Minister said: “What we’ve said all along is true, there is no unallocated pot of money.

“So what we were able to do yesterday, because we know how important it is not have strike disruption and to give workers the best deal possible, will require us making decisions to take money from elsewhere in the budget.

“These will not be easy decisions and the deputy first minister will set out detail of that to Parliament in the coming days.”

The First Minister went on to say that difficult spending choices will be the “hallmark of the next period” for government.

She added: “As we try our best within a fixed, finite budget that is not rising with the rate of inflation, as we try our best to help people who need it most, we’re going to have to take really tough decisions.

“So there is no bottomless pit of money, we’re going to have to make choices about how we target our resources to help people who need it most.”

Ms Sturgeon urged the UK Government to “do its job” by freezing energy bills, providing more funding for struggling people and giving “devolved governments more wherewithal within our budgets to protect public services and public sector workers”.

Ahead of the new Prime Minister taking office on Tuesday, she said: “My very clear message to the incoming prime minister next week is get to work quickly and start taking the decisions that people across the UK desperately need to be taken.”

When asked if the increased offer could set a precedent for other unions looking to increase members’ pay, she said: “I want to give every public sector workforce the fairest possible deal we can.”

“I’m not like the Tory Government who thinks it’s a good thing to try to avoid giving workers fair pay rises.

“I want to give workers fair pay rises – they need them and they deserve them.

“Within the finite resources we’ve got, we will seek to negotiate fairly with all public sector workforces.

“It’s not always the Scottish Government that’s in the lead position but we will do our best to deliver fair pay deals.

“Because that’s good for workers, but actually having a public sector that is working properly, delivering services, is good for the whole country.”