An agreement has been reached between COSLA and the Scottish Government, delivering extra funding to support an unexpected rise in police and fire service staff retiring and taking their pensions.

The deal is in line with the Concordat between central and local government, and sees the Scottish Government providing an extra £20 million and local government bodies also providing an extra £20 million.

The Scottish Government believes that the agreement – which assures full funding for police and fire service pensions – also keeps on track its aim to recruit an extra 1,000 police officers.

"This significant extra funding, which we have now agreed with COSLA, will ensure police forces have sufficient funds to maintain officer numbers and continue with their existing recruitment plans, which are in addition to the 1,000 extra officers that this Government is funding," said Justice Secretary Kenny MacAskill.

"As well as dealing with the exceptional pensions pressure we are facing next year, we have also agreed with COSLA how to address the longer term pensions issues by reforming the management of police and fire pensions which will provide greater certainty for our police and fire boards."

The reforms involve setting pension costs as a fixed proportion of salary costs from 2010/11, with transitional arrangements to be introduced from 2009/10.

COSLA president Pat Watters added that "significant resources" have already been allocated by local government to address a shortfall in pensions funding for this financial year.

"Our commitment to find further resources next year demonstrates our resolve not only to recognise the needs of our employees but also how best we can fulfil our part of the Concordat," he added.

The new investment comes on top of extra Government funding of £32.8 million for 2008/09 and £22.3 million for 2009/10, while local government bodies had already allocated an extra £37 million for 2008/09 before today's announcement.