Local authority leaders across Wales have warned that the provisional 2026-27 local government settlement ‘does not come close’ to matching their financial pressures.

The Cabinet Secretary for Housing and Local Government, Jayne Bryant, yesterday announced that councils will next year receive £6.4bn from the Welsh Government.

The investment, which comes from the Revenue Support Grant and non-domestic rates, means that Welsh councils will receive an average 2.7% funding increase.

In addition, the Welsh Government has also announced over £1.3bn in revenue grants and more than £1.08bn in capital investment for local government.

‘This provisional settlement is the beginning of the budget process. Our priority has been to provide councils with the stability they need to set budgets which protect and deliver core frontline services,’ said Bryant.

‘We will continue to work closely with the Welsh Local Government Association and council leaders to see where we can provide additional flexibility when managing their budgets.’

A statement on the Welsh Local Government Association’s (WLGA) website welcomed the announcement but warned that it ‘does not come close to matching the unprecedented financial pressures facing councils across Wales.’

Cllr Andrew Morgan OBE, WLGA Labour Group Leader, said the settlement showed the Welsh Government ‘recognises the strain councils are facing’, but added that councils will ‘still need to make tough choices, and that remains a concern.’

Cllr Mark Pritchard, WLGA Independent Group Leader, added: ‘I urge Welsh Government to look again at the reality facing councils and to increase the final settlement. Without additional support, the strain on councils to deliver essential services to the public will become untenable. The pressures on council workforces will only get worse and redundancies will be inevitable.’

The settlement announcement follows a warning by Wales' outgoing auditor general that some of the country's councils are ‘very close' to issuing section 114 notices.