Councils in mid and west Wales are again set to receive the lowest funding increase across the country, despite warnings that authorities are facing real hardship.

The Welsh Government’s provisional settlements for county councils in Wales see Ceredigion, Powys, Pembrokeshire and Gwynedd earmarked for a 2.3 per cent increase in funding from April next year – the lowest among all 22 local authorities.

Others in the south of Wales where Labour has traditionally had a voting stronghold will benefit from rises up to 4.3 per cent in the case of Newport – the constituency of the Cabinet Secretary for Housing and Local Government. Jayne Bryant.

The Wales-wide average increase is 2.7 per cent.

The latest below-average funding increases follows on from last year, where councils in rural Wales received a funding boost below the Wales average of 4.3 per cent for 2025/26 with authority chiefs warning that the funding is simply not enough to support services and head off double digit tax rises for residents.

That was despite a funding floor being introduced, albeit at a lower level than the councils said they required.

Ceredigion County Council said its funding settlement “fell significantly short of the amount required to keeping sustaining the current level of public services” in the county as it received the lowest increase per head of population across all of Wales for the second year running.

A report from Gwynedd council has warned that “we have now reached a point where we cannot squeeze more of it without cutting services that would have a clear and direct impact on the residents of Gwynedd.”

Powys council warned of more ‘difficult decisions’ to be made to balance its budget and said that the “increase will not be sufficient in meeting the severe pressures the council is currently facing due to increased demand for services, price inflation, provider costs and national pay awards.”

The Welsh Local Government Association (WLGA), which represents Wales’ 22 councils, said local authorities face £560m of pressures in 2026/27 – £100m more than expected – and that plugging the gap for next year would require an average council tax increase of 22 per cent or the loss of 14,000 jobs.

Local Government Secretary Jayne Bryant, said: “We have been listening to local government, and we fully recognise the challenges that they face.

“This provisional settlement is the beginning of the budget process.

“Our priority has been to provide councils with the stability they need to set budgets which protect and deliver core frontline services.

“We will continue to work closely with the Welsh Local Government Association and council leaders to see where we can provide additional flexibility when managing their budgets.

“We are committed to working with all parties to develop a budget which ensures our public services can continue to operate effectively and which can be passed by the Senedd in the final months of this term.”

The final budget will be published in January following consultation with local authorities and stakeholders.