Welsh councils are set to receive millions of pounds in extra funding, which should alleviate potential service cuts and council tax rises.

Before Christmas, the Welsh Government announced its provisional local government settlement, which will see every Welsh local authority receive at least an extra 8.4% funding for 2022/23.

The Welsh Local Government Association, which represents all 22 local authorities, described the proposals as “one of the best financial settlements since the beginning of devolution”.

The settlement – which is the block grant received each year from the Welsh Government  – makes up the bulk of all council income.

But largely due to huge reductions during a decade of austerity, many councils, including Caerphilly County Borough Council, have found themselves cutting services as well as implementing politically unpopular council tax rises to make up some of the shortfall.

In an announcement, Wales’ Minister for Finance and Local Government said staff pay rises, as well as living wage costs for care workers, had been factored into the increased settlement.

Rebecca Evans MS said funding for local government in 2022-23 will increase by 9.4% on a like-for-like basis compared to the current year, with no authority receiving less than an 8.4% increase.

Caerphilly will receive an 8.5% increase – with only Rhondda Cynon Taf and Blaenau Gwent seeing a smaller rise.

Ms Evans said healh and local government services were “priorities” for the Welsh Government, and described the increases as “a good settlement for local government”.

Plaid Cymru’s spokesperson for Finance and Local Government, Ll?r Gruffydd MS, welcomed the announcement.

“The last two years has underlined the critical role that our local councils play in so many aspects of our lives,” he said.

“They have gone the extra mile to keep us safe whilst still delivering the core services so many of us depend upon.

“We hope this provisional settlement will allow that crucial work to continue, whilst also helping to deliver the commitments in the Co-operation Agreement between Plaid Cymru and the Welsh Government, not least the provision of free school meals to all primary school children.”

The Welsh Conservatives’ Shadow Minister for Local Government, Sam Rowlands MS, welcomed the funding increases and said: “Councils have gone above and beyond throughout the pandemic”.

However, Mr Rowlands hit out at “years and years of underfunding from the Labour government” and questioned the timing of the announcement, with council elections set to be held in May this year.

He said: “If I had to make a bet, I would say they are planning to cut budgets again after the election year, meaning councils will be forced to axe services and residents could be faced with higher tax bills as a result.”