Average Ceredigion households look set to be billed an extra £100 per year after top councillors voted in favour of a recommended 7.3 per cent council tax rise.

A Ceredigion County Council cabinet meeting yesterday (24 January) saw agreement from all councillors that the steep increase from April is considered necessary to plug a budget shortfall of more than £12million.

Other options considered at the meeting included raising the tax burden for residents to 6.3 per cent or 8.3 per cent – with 1.3 per cent of any of the options being used to fund a 13 per cent rise in the Mid and West Wales Fire Authority budget.

The 7.3 per cent rise, voted for as the preferred option during yesterday's meeting, would see an average Band D resident pay another £105.72 a year.

During his opening address, it was a sign of things to come as the council’s financial officer Duncan Hall described the budget as ‘the most difficult the authority has faced since the austerity era - if not in living memory.’

The ‘difficult decisions’ discussed in the meeting come amid a 40-year-high inflation rate of 10.5 per cent and UK households enduring a crippling cost of living crisis.

County council leader (Plaid Cymru), Cllr Bryan Davies, told the cabinet: “This is probably the worst time of year as far as decision-making is concerned.

“The financial predicament seems to be getting worse and we have to make difficult decisions very often.

“When taking into account the cost of energy and inflation etc for the council to continue to run as it has been it’s going to cost us an additional £22m.

“We have received an increased settlement from the Welsh Government but even with that increase we’re facing a shortfall of £12m.

“So, it needs to be found from budget savings and council tax increase considerations.

“In Ceredigion inflation is more like 13 per cent so the financial burden is even greater.

“On average, as far as a Band D property is concerned, it costs £1,777.27. This is equivalent to average levels in Wales but if you compare this to England this would be over £2,000 for the same banding.

“We are aware of the cost of living out there and the effect this has on household finances. Hopefully we can keep the increase under inflation.”

The average Band D property would pay £1,553.60 in 2023/24 - for the county council element of council tax only (not including the fire authority or police precepts) - up from £1,447.90 in the current year.

The recommendation to ask residents to find extra money to keep services running comes despite an 8.1 per cent uplift in Welsh Government funding, but significant increased costs for energy and other bills.

Cabinet member for finance Cllr Gareth Davies (Plaid Cymru) said: “We do face numerous challenges which are outside of our control: energy costs, fuel costs, increasing salaries more than we have in the past and contracts we are renewing.

“Usually, Ceredigion is at the bottom of the list but we are ninth in the league, if want to call it that, in terms of what has been offered (by the Welsh Government).

“One of the principles here is to avoid cutbacks to the services we provide as much as possible. It’s not possible to say there won’t be job losses but we do try to avoid them if possible.

“We are in a solid place and we have a strong budget, a strong balance sheet

“Audit Wales said the financial situation of the council is stable but we must continue to make sustainable savings.”

Cllr Davies referred to significant pressures on education and social care in particular.

Questions were asked about why the council was forcing the responsibility to make cuts onto the county's cash-strapped schools with the budget failing to cover the rising £4.8m cost pressure they are facing.

Leader of the Independents’ Group, Cllr Gareth Lloyd, said: “Why is it education that is not being covered in its entirety?

“I understand that school have reserves and that could assist for a year but because of the cost of energy and gas, schools will have to spend even more than they thought this year.

“And would any funding be left over to potentially go to schools or kept back?”

But Cllr Davies and officers said that footing the bill for schools' added cost pressures wouldn’t be possible without a council tax increase of around 12 per cent and £2.1m saving being forced onto other departments.

A council officer ominously suggested it is ‘inevitable that we will have to look at education infrastructure’ in terms of schools which are judged to be no longer ‘viable’ - as well as hinting at cuts to school transport budgets.

In response to Cllr Lloyd suggesting social care services were ‘under strain’ and demanding confirmation they are still ‘fit for purpose’, an officer assured cabinet members that a new strategy for savings in social care would be delivered despite increasing demand.

Liberal Democract group leader Cllr Elizabeth Evans said: “This year the householders of Ceredigion - including us councillors - face unprecedented challenges on their family budget. One of my residents’ quarterly energy bills had gone up from £200 to £400 and they can ill afford it

“If we do get an improved final settlement in February (as we did last year) from the Welsh Government, I ask that you do (again) consider passing that down to the householders of Ceredigion because it is much needed.”

The Welsh Government is expected to provide its final budget settlement at the end of February.

The overall council budget planned for 2023/24 is just over £180m, with council staff set to identify cost savings and service cuts in a bid to fill the shortfall.

The council is facing costs including an extra £5m for social care, including £2.5m for a Real Living Wage pay rise for social care workers, along with an estimated £8.7m in council staff pay rise costs including teachers.

Rises in fuel, food and energy costs are set to cost an additional £2.1m, with an extra £1.1m needed for a rise in transportation costs.

Cabinet members voted unanimously in favour of the 7.3 per cent rise option and to refer the decision made and questions asked to council scrutiny committees in February before final budget decisions are made at a full council meeting on Friday, 3 March.