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A “huge gap” remains in Caerphilly County Borough Council’s budget for the next two years despite a funding increase from the Welsh Government.

The council will receive a 4.6% increase in its settlement next year, equating to an extra £16.1 million in central government funding, according to provisional figures.

Caerphilly Council has warned it is facing a £45 million budget gap over the next two years, because the cost of running services has risen more quickly than any increases in government funding.

The 4.6% increase proposed for next year is the ninth-highest in Wales and is slightly above the 4.3% national average.

Cllr Eluned Stenner, the council’s cabinet member for finance, said the local authority would “need to consider the full implications of the settlement announcement and work through the details” ahead of preparing the council’s draft budget for 2025/26.

“We welcome the 4.5% increase from the Welsh Government, but the fact remains that we are still faced with a huge gap in our budget over the next two years,” Cllr Stenner added. “Whilst this additional money will help, we still need to make some very difficult decisions in the year ahead as we seek to transform services and deliver more savings.”   

“A key part of this process is engagement with residents, which will be particularly important in the new year as we launch our detailed budget consultations.”

Cllr Colin Mann, the Plaid Cymru group’s spokesperson for finance, said the 4.5% rise proposed for the county borough was “possibly a little more than expected”.

He said the extra money “should now lead to the Labour leadership on Caerphilly Council reconsidering some of the more controversial proposals, such as the proposed closure of a string of libraries and the mothballing of Llancaiach Fawr”.

Cabinet members agreed to mothball the heritage site, which it subsidised, in September despite a public backlash to the proposals.

Cllr Mann also said the council should reconsider its plans to potentially close 12 libraries across the county borough.

“Certainly, on the libraries the council should be meeting the concerns of local people by looking at alternative ways of running libraries and examining what other local authorities have done to preserve them,” he said. “Many residents in our smaller communities feel they are being sacrificed so that the benefit can go to the areas with more people.” 

Cllr Lindsay Whittle, who leads the Plaid Cymru opposition group in the council chamber, said the provisional settlement for Caerphilly is “not enough” and “the crumbs from a spartan table”.

We were told the Labour UK Government and the Welsh Government would be working together, but I haven’t seen much evidence of that since July 4,” he added.

Jayne Bryant, Wales’ local government secretary, said the “overall settlement for 2025/26 is more than £1 billion higher than it would have been under the previous UK government”, but added it would “take time for public finances to recover”.