Councils in mid and north Wales are “on the edge of a precipice”, with Ceredigion, Powys and Gwynedd all set to receive a below Wales average funding rise for next year that will leave “difficult choices” having to be made on service cuts and council tax rises.

Cabinet Secretary for Housing and Local Government, Jayne Bryant, announced that local authorities will receive £6.1bn from the Welsh Government to spend on delivering key services for 2025/26.

Gwynedd and Powys are both receiving a rise of 3.2 per cent while Ceredigion is getting 3.6 per cent.

All three are well below the Wales average of 4.3 per cent, with authority chiefs warning that the funding is simply not enough to support services and head off double digit tax rises for residents.

Ceredigion County Council said its funding settlement “falls significantly short of the amount required to keeping sustaining the current level of public services” in the county.

“For the second year running, the residents of Ceredigion will be receiving the lowest increase per head of population across all of Wales,” the council said.

“Ceredigion is receiving one of the lowest settlements in Wales, whilst some local authorities are receiving well over a five per cent increase and the average for all local authorities is 4.3 per cent.

“Ceredigion continues to urge Welsh Government to review its funding formula to ensure that it reflects the challenges of providing services to communities in a rural area.”

The council urged Jayne Bryant to find additional funding to help rural authorities.

“Bringing in a minimum funding ‘floor’ of 4.3 per cent would cost Welsh Government £18m and would enable any council tax rise to be 1.9 per cent lower in Ceredigion, alternatively applying a fixed minimum increase for all Local Authorities of at least £7.5m would cost Welsh Government £11m and would enable any Council Tax rise to be 4.7 per cent lower in Ceredigion,” the council said.

“Without additional funding from Welsh Government the council faces a stark choice, which it needs to be honest about with its residents – either the burden will fall on council tax or yet more cuts and cessation of services will need to be considered.

“This is on top of the council having delivered £68m of savings over the last 12 years through austerity and beyond, which has in effect taken close to £500m out of the Ceredigion economy during that same 12 year period.”

Gwynedd council said it has “once again received one of the lowest financial settlements from the Welsh Government” and warned that “further cuts to local services and Council Tax increases will therefore be inevitable in 2025-26.”

“During 2025-26, the cost of providing essential local services in Gwynedd will increase by around £22.4 million due to national factors and demographic changes which are beyond the Council’s control,” a council spokesperson said.

“Welsh Government has announced, however, that Gwynedd will only receive an additional £13.5 million in its Revenue Support Grant Settlement, resulting in a funding shortfall of £8.9 million.”

Council leader Cllr Nia Jeffreys said: “While the national headlines may be more positive than in previous year, this is of little comfort to people in Gwynedd who will once again see their Council receiving one of the lowest grant settlements from the Welsh Government.

“After adjusting the baseline for transfers into the settlement, the average revenue increase for the 22 Welsh councils will be 4.3 per cent, however Cyngor Gwynedd’s increase will be 3.2 per cent.

“While the sums involved are marginally better than we had feared, the reality is that as a Council we will have no option but to implement cuts and increase Council Tax to protect the essential services we provide to the county’s most vulnerable people.

“Cyngor Gwynedd has no control over national and demographic changes which are increasing the costs of our services.

“Yet, as a Council, we must provide for the most vulnerable and balance our budget even when government funding is lacking.

“Over the past year, we have been hoping for the best but preparing for the worst.

“Unfortunately, we are now seeing our fears come true and as councillors we will be forced to make extremely difficult decisions early in the new year.”

Cllr Jeffreys, in a joint statement with Ceredigion council leader Cllr Bryan Davies warned that Welsh Councils are “on the edge of a precipice”, and “public services face an existential crisis without an immediate re-think.”

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.”

Cllr David Thomas, Cabinet Member for Finance, said: “Although we have seen an increase in our local government provisional settlement from the Welsh Government, the reality is that there is still a funding shortfall that we will need to address to ensure we deliver a balanced budget.

“It is clear that the money available to spend on public services really is becoming ever-more restricted and this will dominate the way we deliver services for many years to come.

“The council is facing some difficult decisions as we look to deliver a balanced budget which could see changes to the way we deliver council services as well as an increase in council tax.”

Montgomeryshire MS Russell George said Powys is “getting a raw deal again.”

“Yet again Powys is short-changed and languishing close to bottom of the table in terms of funding.

“I want to see a funding formula that reflects the situation on the ground, promote fairness across the whole of Wales because here in mid Wales, we are being forgotten about.”

Plaid Cymru’s Local Government spokesperson, Peredur Owen Griffiths said: “To fill the £559 million funding shortfall caused by Labour mismanagement, local authorities needed at least a seven per cent increase in revenue just to maintain the vital public services they provide, let alone start on the improvement required in these vital services.

“This announcement simply does not go far enough to ease the budgetary constraints faced by Welsh councils, and will force them into tough decisions on the future of public services that have already been cut, some even disappearing entirely.”

Cabinet Secretary for Housing and Local Government, Jayne Bryant said: “This settlement reflects our ongoing commitment to protecting core frontline public services as far as possible, supporting the hardest hit households and prioritising jobs.

“We have been through a long period of austerity, with huge increases in demand for major services, a pandemic, and an extra-ordinary inflationary period.

“We have been listening to local government to continue to understand the challenges they’re facing.

“We know that even with this increase our councils will still have to make difficult local choices.

“However, no local authority will see an increase of less than 2.8 per cent next year and we will continue to work with local authorities on areas where we might be able to provide additional funding by the time of the final budget.”