He said: 'Over the next three years we will invest more resources in improving local services: we will allocate a further£188m, then£531m and£827m to councils to enable them to deliver improvements in education, community care, transport and quality of life.'
The spending review has been criticised by some for failing to tie extra cash to reform, unlike its English and Welsh counterparts, but Mr Kerr claimed funding for local government is linked to improved
This was seized by Convention of Scottish Local Authorities president Pat Watters (Lab) who said the absence of ring-fenced funding represents a new relationship between local government and
He said: 'First minister Jack McConnell has said he wants to develop a new relationship with us. There is now an open door approach and we have instant access to ministers.
'In the past, there is no doubt we would have been very sceptical with such a settlement, but given the new mature relationship we have, we are prepared to take them at their word that there will be no ring-fencing and no new initiatives.'
However, much of the extra cash will be taken up by existing initiatives such as the McCrone reforms on teachers' pay and conditions, concessionary fares and free personal care.
The spending announcement represents conciliation in a long-running row over the level of ring-fencing, although privately local government leaders insist the figure is far higher than the 8% of funding which Mr Kerr says is ringfenced.
More than£4bn is being provided for public services as a whole, but Unison's Scottish secretary Matt Smith said it is vital the extra cash does not end up in the hands of private sector firms.
He said: 'Public services in Scotland are at a crossroads. We need to increase core resources to make sure those who deliver the services have the pay, training and resources to allow them to do so. We must give them the tools to do the job.'