FINANCIAL challenges mean that a council tax increase next year is inevitable, the county council’s cabinet has said.

Although the provisional revenue settlement shows an average increase in external finance of +0.2 per cent for 2012-13, the standstill in the grant settlement, the need for additional resources, demographic pressures, and general inflation, means that it is effectively a cut of some five per cent in real terms.

These figures led to the announcement by county council leader Councillor John Davies that a council tax freeze is not an option.

Cllr Davies said the authority also faced a number of additional financial challenges.

They include the rising cost of fuel, which has a significant impact on the provision of council services in a rural area, and the decision by finance minister Jane Hutt that the £39million given to the Welsh Government is not to be used specifically on council tax freezes.

In addition, the Welsh Government has recently announced that the council’s contribution rate towards the 21st Century School bid will be set at 50 per cent, not the previous 30 per cent.

Cllr Davies said: “I will be very clear when I say that there will be a council tax increase.

“It will be a low one – hopefully one of the lowest cash increases in Wales – if not the lowest.”

He added that any increase in council tax in the 2012-13 budget will be nowhere near four per cent.

The council’s draft budget for 2012/13 will be considered by the cabinet on January 9th, 2012, for approval by full council on February 23rd.