Carmarthenshire County Council, like all local authorities across Wales, is facing difficult decisions as it plans its budget for the coming financial year. The Council is currently facing a shortfall of £25 million in its draft 2026/27 budget.

Over three quarters of the Council’s net revenue budget, which funds essential day-to-day services such as social care and education comes from grants from the Welsh Government, which in turn gets an annual block grant from the UK Government.

Only 17% of the Council’s income comes from the Council Tax.

Visit Carmarthenshire County Council’s website to complete its 2026/27 Budget Consultation.

Welsh Government announced on 24 November 2025 that Carmarthenshire would receive a provisional funding settlement increase of 2.3%. To help bridge this gap, the Council has identified operational savings of over £9.5 million across its services and has utilised a recurrent saving of £5 million from its employer contribution to the Dyfed Pension Fund. However, despite a proposed increase of 6.5% in Council Tax, the Council still faces a remaining shortfall of £3.5 million in its draft 2026/27 budget.

These figures were prepared prior to the Welsh Labour Government’s budget deal with Plaid Cymru on 9 December 2025, which may result in an overall increase of 4.1% in funding to Carmarthenshire County Council’s budget for the next financial year. The Senedd will vote on the deal on 20 January 2026. Until the final funding position is confirmed, the Council is consulting with its residents based on the initial provisional settlement of 2.3%.

The Council has a legal responsibility to set a balanced annual budget, ensuring that income from sources such as the Revenue Support Grant (RSG), Council Tax, paid-for services and grants is sufficient to meet its expenditure.

Last year, the Council made spending reductions of more than £8 million, including savings in areas such as educational transport, public conveniences, and some cultural and leisure services. Building on this work, the Council is now proposing a further £9.5 million in operational savings for 2026/27.

The proposed savings focus on services including Integrated Services, Adult Services, Children’s Services and Environmental Infrastructure. These include expanding in-house care services, supporting greater independence for residents where possible, expanding its Families Together programme to prevent children from requiring placement into local authority care, increasing local fostering provision and identifying efficiencies across highways and transport services.

In addition to departmental savings, the Council’s budget position is significantly supported by a reduction in employer contributions to the Dyfed Pension Fund. Strong investment performance has enabled the Fund to reduce the Council’s employer contribution rate from 16.2% to 12.5% from April 2026 to March 2029. This provides a recurrent saving of £5 million, with no loss of services, no job losses and no impact on pension benefits.

Carmarthenshire County Council’s Cabinet Member for Resources, Cllr Alun Lenny said:“Carmarthenshire County Council, like all local authorities across Wales, is facing very difficult budget decisions due to factors largely outside our control, including inflation, nationally agreed pay settlements and the level of funding provided by the Welsh Government.

“The growing demand on council services also places significant pressures on our finances. Social care is particularly affected, with a growing population aged over 75 increasing demand in Adult Services, together with higher commissioned care costs, Foundation Living Wage increases and capped client contributions.

“Children’s Services are also facing substantial pressures, with more children requiring specialist residential placements, higher fostering payment rates and increasing complexity of need adding to costs.

“Education is similarly impacted by school overspends, inflation and pay awards, as well as rising levels of complexity and need among children and young people, including Additional Learning Needs, Elective Home Education, attendance and behaviour.

“On the basis of Welsh Government’s initial 2.3% provisional settlement, we are still faced with a significant shortfall in our budget for next year, despite identifying £9.5 million of operational savings for 2026/27. That is why it is important that our residents, visitors and stakeholders have their say on how we bridge this financial gap. While the Council is working hard to manage these pressures, our financial position remains extremely challenging.”

The Council is inviting residents, businesses and community and voluntary organisations to have their say on the proposed budget savings for 2026/27. Feedback received through the consultation will be considered by councillors as part of the final budget-setting process.

Councillors will consider the views expressed in this consultation alongside operational proposals to the value of around £9.5million when the budget is finally approved by Full Council in March 2026.

People can share their views online or by visiting a council customer service Hwb in Llanelli, Carmarthen and Ammanford town centres.

The budget consultation closes on February 1, 2026.