Funding for councils in Wales has been cut by £154m, leading to warnings of future redundancies and the closure of public services.

Finance minister, Jane Hutt, unveiled the Draft Welsh Government Budget yesterday which pledged an extra £425m funding for the NHS over the next two years. However, councils were warned to expect a 4.5% cut to grant funding.

Council leaders warned that local government would need to make a budget shortfall of up to £900m, which would make may services ‘unaffordable’ in the future.

Cllr Aaron Shotton, spokesperson for finance at the Welsh Local Government Association, said: ‘As councils we will have no option but to look seriously at charging for services and different models of delivery. The reality however, is that many of the services that communities take for granted are now at risk, including leisure centres, libraries, community facilities and day centres.

‘Redundancies will unfortunately become unavoidable, and I fear for the future of services that provide critical support to the most vulnerable in the community.’

The WLGA warned that council finances have already reached the ‘tipping point’ and called for an assessment of the whole local government finance system.

Ms Hutt said: ‘This is a responsible, pioneering and sustainable budget that supports our Priorities for Wales. Our principles of social justice and fairness are at the heart of our spending plans and our focus on preventative measures and early intervention have shaped our entire approach to this Budget.

‘Faced with unprecedented cuts by the UK Government, we have had to make difficult decisions to protect the services people the length and breadth of Wales rely on.’