Cash strapped, deep in red ink, with limited reserves and one-in-20 in Ceredigion in arrears on their tax bills, the county council is warning its finances will be “extremely challenging” and it must make “some very difficult choices”.

The warning comes in the same week that top council brass sent an email to staff telling them that restructuring was on the cards but to ignore media reports that questioned its overall financial health.

That internal email contradicts an official written appraisal written by Council Leader Bryan Davies that warns “challenges” face the local authority.

Earlier this month, Cambrian News reported Ceredigion was £127million in debt, had increased its borrowing over the past fiscal year by some £20million to cover Aberaeron sea defence works, raised its debt levels by almost 18.5 per cent in fiscal 2024-25, and only has cash reserves of £41 million to hand.

In the latest report on its status, Cllr Davies says: “The financial picture is extremely challenging, and while we continue to explore innovative ways to deliver services, there will nevertheless be some very difficult decisions to be taken in future years.”

Cambrian News sources in council administration say the “mixed messages” are extremely worrying”.

“On the one hand they say, ‘don’t worry, be happy’, on the other, it’s there is restructuring of departments coming, the Cambrian News is wrong, but the finances are really tight',” one source said.

Staff face disciplinary action for talking to the press.

Ironically, the report that contains the warning from Cllr Davies, is a mandatory Self-Assessment Report required by the Welsh Government on each council’s annual performance.

Cllr Bryan Davies said that while there are “challenges” ahead for the authority, the council “has been able to deliver tangible improvements and tackle the things that matter most to people in Ceredigion throughout the year.”

Last year’s self-assessment report for 2023/24 came at a time when deep service cuts, rising council tax for residents and closures of schools, libraries and care homes were all hitting the headlines and causing widespread concern throughout the county.

Cllr Davies said at the time that the results of that review were “excellent”, and the fresh self-assessment, on the back of another council tax in April, has found that the council is performing well against national benchmarks despite a difficult financial backdrop with millions of pounds in savings and cuts needing to be found to balance the books.

“In October 2024 we underwent our first Panel Performance Assessment, which is a new statutory requirement for all local authorities,” he said. “It confirmed much of what the performance data was already telling us.

“The independent review panel concluded that Ceredigion is a well-run council despite the high service demands and very significant financial pressures being faced by local authorities.”

The latest Local Authority Performance Profile measures council performance across 34 metrics.

The latest data from June shows that Ceredigion has 13 measures in the upper quartile, nine in the upper middle quartile, five in the lower middle quartile and six in the lower quartile.