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Early funding estimates for next year are “nowhere near enough” for local government services, the leader of Caerphilly County Borough Council has warned.

The Welsh Government has published provisional settlement figures showing Caerphilly Council is in line to receive a 2.6% funding increase next year.

That provisional figure is slightly below the Welsh average (2.7%) and is the tenth-highest of the nation’s 22 local authorities.

In cash terms, it suggests the council will receive nearly £9.9 million more next year to cover the costs of the public services it provides.

The final settlement could change over the coming months as the governments in Cardiff Bay and Westminster iron out budget arrangements.

Cllr Jamie Pritchard, who leads the local authority, said: “I accept the provisional settlement is a starting point for negotiations, and I recognise a funding flaw offers some security. But the proposed settlement is nowhere near enough for local government.”

He called the provisional figures “effectively another real-terms cut when you consider inflation and service pressures”.

Cllr Pritchard said he would use his position as council leader to “continue to make the case for an improved financial settlement”, and warned that “local government can not sustain continuous austerity”.

Jayne Bryant, the cabinet secretary for housing and local government, said “we are all aware of the pressures on households”, adding the Welsh Government’s ambition was to pass a budget which “safeguards jobs and protects frontline public services”.

The 2.6% rise in funding proposed for Caerphilly is a smaller increase than the 4.5% the council received last year, which worked out at around an extra £16 million towards the authority’s budget.

The central government settlement makes up the vast majority of the funding for councils in Wales.

Councils provide services from schools and social care to waste management and maintaining roads.

Cllr Charlotte Bishop, the leader of the Plaid Cymru group in the council chamber, said “any increase is welcome, but let’s be honest, our community has been ignored for far too long”.

“A 2.6% rise won’t undo years of underfunding that have pushed councils and frontline services to breaking point,” she warned.

“Wales deserves a fair, sustainable settlement that truly reflects the pressures our communities face. We need to keep fighting to make sure local people get the investment and respect they deserve.”

Lindsay Whittle, Plaid’s Senedd Member for Caerphilly and a former council leader, added: “It is vital that the council protects frontline services going forward, including libraries. The education of our children is vital and libraries are a lifeline for many people.”

Cllr Nigel Dix, who leads the independent group in the council chamber, called the provisional settlement figure “remarkable when you consider the rising costs of energy and National Insurance” for local authorities.

“We’re going to end up with ever-higher council tax”, he warned, describing the plans as an “own goal”.