A better financial settlement for Pembrokeshire from the Welsh Government worth millions of pounds, following an agreement with Plaid Cymru, has avoided “a disaster for public services,” a senior councillor has said.

While council tax makes up a proportion of the council’s annual revenue, a crucial area of funding is the Aggregate External Finance (AEF) rate from Welsh Government.

Pembrokeshire was to receive a 2.3 per cent increase on its settlement, a total of £244,318,000, amounting to an extra £5,493,000, placing it at joint 13th of the 22 local authorities in Wales.

Now, following a Welsh Government and Plaid Cymru agreement which will allow the budget for 2026-27 to pass there has, amongst other agreements, been additional funding for local government in 2026-27, an extra £112.8m, which provides an overall 4.5 per cent increase to the local government settlement, with all councils receiving increases above 4 per cent.

The agreement will be reflected in the Final Budget – together with other allocations to be made by the Welsh Government, which do not form part of the agreement – which is published on January 20.

Pembrokeshire County Council’s Cabinet Member for Corporate Finance Efficiencies Cllr Alistair Cameron responded, saying: “I am pleased that an agreement has been reached which will be supported by the Senedd. It would have been disastrous for public services in Wales if there was no agreement.

“For Pembrokeshire, this means that the funding from Welsh Government will increase by 4.2 percent. This equates to over £10 million which will help us to deliver local services such as education and social care.

“However, I still have great concerns that the Welsh Government’s funding mechanism does not sufficiently recognise the challenges of delivering vital services in a rural county and providing care for an older population as we have in Pembrokeshire.

“By contrast, some urban councils have been awarded bigger increases such as 6.1 percent in Newport and 5.2 percent in Swansea. We are therefore writing to Welsh Government to express our concerns about the unfairness of the funding mechanism.”

2024 saw Pembrokeshire receive a higher-than-expected settlement increase of 3.6 per cent from Welsh Government – amounting to just over £8.1m – against a predicted two per cent.