Residents in Ceredigion are facing a lower than expected council tax rise in the wake of extra local authority funding from a Welsh Government budget deal, with finance chiefs now aiming for a council tax increase of 4.75 per cent from April.

The Welsh Government’s provisional settlements in its draft budget for county councils in Wales saw Ceredigion earmarked for a 2.3 per cent increase in funding from April next year – the lowest among all 22 local authorities.

That initial settlement figure saw Ceredigion finance chiefs outline a near seven per cent increase to council tax from next year to balance the books – down from a first mooted nine per cent rise.

But a Welsh Government and Plaid Cymru agreement hashed out in December to allow the budget for 2026-27 to pass saw an extra £112.8m in additional funding for local government in 2026-27.

The new funding means that Ceredigion County Council will now receive a 4.1 per cent rise in their settlements for April – still the lowest in Wales but almost double the initial settlement, allowing the council to mitigate the effect of spiralling costs amid service cuts and council tax rises.

In budget papers to be put before Ceredigion County Council’s Cabinet on Tuesday, 13 January, plans are being put in place to reduce the council tax increase in Ceredigion to 4.75 per cent from April.

The planned council tax increase will be accompanied by “no direct cuts to services”, documents said, as was the case last year.

Despite the uplift in funding, the council report said it “remains quite clear that Ceredigion, as a smaller more rural authority, continues to fare poorly relative to other local authorities and that the formula funding does not properly recognise the challenges of delivering services in a rural county.”

Last year, the Cambrian News revealed that almost five per cent of households in Ceredigion are not paying council tax amid huge rises in the past five years.

It followed a 9.3 per cent rise last year which was opposed by some councillors who warned that families in the county “are at breaking point.”

That rise followed huge hikes in previous years, including 11.1 per cent in 2024/25 and a 7.3 per cent rise in 2023/24.

The draft budget report to be put before members said: “Striking the right balance between budget decisions and proposing a palatable level of council tax increase is an unenviable one for members.

“However, the council tax considerations are considerably less than those in recent financial years.

“Current proposals would equate to an increase of just under £7.50 per month for a Band D property.”

The final Welsh Government settlement is expected to be published on 20 January.

A final budget recommendation will be made by the council’s Cabinet on 10 February.

The budget for 2026/27 – including any rise in council tax – will be decided upon by full council at a meeting on 2 March.