A better financial settlement for Ceredigion from the Welsh Government could see council tax bills next year rising by less than five per cent rather than nearly seven, councillors heard.

While council tax makes up a proportion of the council’s annual revenue, a crucial area of funding is the Aggregate External Finance (AEF) rate from Welsh Government.

Ceredigion was to receive a 2.3 per cent increase on its settlement, some £3,388,000 for a total of £150,670,000, placing it at joint 13th of the 22 local authorities in Wales.

Now, following a Welsh Government and Plaid Cymru agreement which will allow the budget for 2026-27 to pass there has, amongst other agreements, been additional funding for local government in 2026-27, an extra £112.8m, which provides an overall 4.5 per cent increase to the local government settlement, with all councils receiving increases above 4 per cent.

The agreement, which also includes additional NHS funding, will be reflected in the Final Budget – together with other allocations to be made by the Welsh Government, which do not form part of the agreement – which is published on January 20.

At the November meeting of Ceredigion County Council, before the increased settlement was announced, Leader Cllr Bryan Davies said that early estimates indicated that an 8.9 per cent increase in council tax would be necessary, but an improved position of 6.9 per cent has now been indicated as a result of a further modelling of service cost pressures and operational savings.

Following on from that, at the December 17 meeting of the council’s thriving communities overview and scrutiny committee, Corporate Lead Officer and Section 151 Officer Duncan Hall was questioned about what effect the revised figure would have for Ceredigion tax-payers.

Mr Hall, who stressed any changes were “a political decision” for Cabinet and subsequently full council, but said the revised settlement “certainly takes you below seven per cent,” adding he did not expect it, subject to councillor decisions, “to exceed five per cent”.

Plaid Cymru Ceredigion MS Elin Jones has previously welcomed the news Ceredigion’s settlement will increase to over four per cent: “This will provide a far better settlement for Ceredigion Council and local taxpayers. It can be used to relieve the pressure on tight budgets for our public services, and also reduce the burden of council tax on ratepayers in Ceredigion.”

Ceredigion’s first 2026-’27 budget report for Cabinet is expected on January 13 of next year.