Powys County Council is proposing a 13.5 per cent rise in council tax this year.

The council says the major increase is necessary to ensure they can deliver “critical public services” amid “extraordinary financial pressures” and a shortfall of £13.5 million in its budget.

But the leader of the council says that the council tax rise will not be enough by itself to bridge the funding gap and warned that “some difficult and potentially unpopular decisions” will also need to be taken.

Leader of Powys County Council, Liberal Democrat Cllr James Gibson-Watt, said: “Although we have seen an increase in our local government provisional settlement from the Welsh Government, the reality is that it is not enough to bridge the gap in our increasing costs.

“A combination of increasing demand for services, particularly in social care, price inflation, provider costs and national pay awards, mean that the council is facing some difficult decisions as it looks to deliver a balanced budget for 2025-26, which is a legal requirement.”

Last month it was announced that Powys County Council is set to receive a below the Welsh average funding settlement from the Welsh Government.

The average rise for the Welsh Government settlement throughout Wales is 4.3 per cent, but Powys is set to receive 3.2 per cent, equating to £7.770 million more, putting them near the very bottom of the Welsh funding league table, 21 out of 22 local authorities.

Powys has been joined by other rural councils such as Monmouthshire (2.8 per cent) at the bottom of the funding pile while the councils for urban areas such as Cardiff (5.3 per cent) and Newport (5.6 per cent) have benefited the most from the increased government funding.

The dire financial situation has prompted Labour’s Cabinet Members in Powys to write to the Welsh Government to ask that a ‘Rural Premium’ be considered, to be paid outside of the funding formula.

In announcing the expected council tax increase, Cllr Gibson-Watt said the council is working to develop a budget strategy that protects important services such as “social care, waste collections, schools and homelessness.”

“We know that the people of Powys, like the county council, have been facing severe financial conditions for a number of years. That’s why we will only increase council tax to meet the costs of running council services,” he said.

“We know this is difficult, and we will do all we can to mitigate the impacts and protect vital public services.”

But the council leader warned that “potentially unpopular” decisions will still need to be taken to balance the books.

“It is clear that closing the budget gap through an increase in council tax alone is not possible so we will have to take some difficult and potentially unpopular decisions to deliver a balanced budget - something we are legally obliged to do,” he added.

Senedd member James Evans has labelled public services as “broken” amid the news that Powys residents could be hit by the major council tax hike.