The authority has opened a public consultation as it tries to plug the gap in its draft 2026/27 budget, warning that rising demand, inflation and national pay awards have pushed its finances to breaking point. More than three‑quarters of its day‑to‑day spending is funded by Welsh Government, while just 17% comes from council tax.
£15m already saved — but £3.5m still missing
Carmarthenshire has already identified more than £9.5 million in operational savings across departments, alongside a further £5 million in recurrent savings thanks to reduced employer contributions to the Dyfed Pension Fund.
Despite this £15 million in efficiencies — and a proposed 6.5% council tax rise — the council still faces a £3.5 million hole in its draft budget.
The figures are based on Welsh Government’s provisional settlement of a 2.3% funding increase. A later budget deal between Welsh Labour and Plaid Cymru could raise this to 4.1%, but councillors say they must consult residents on the lower figure until the Senedd confirms the final settlement.
Cuts planned across social care, education and infrastructure
Last year, the council made more than £8 million in reductions, including cuts to school transport, public conveniences and some cultural and leisure services. A further £9.5 million in savings is now proposed for 2026/27.
The plans include expanding in‑house care services, supporting greater independence for residents, increasing local fostering provision, extending the Families Together programme and finding efficiencies across highways and transport.
A major financial boost comes from the Dyfed Pension Fund’s strong investment performance, which allows employer contributions to fall from 16.2% to 12.5% between 2026 and 2029 — saving £5 million a year without affecting jobs, services or pension benefits.
‘Extremely challenging’ year ahead
Cllr Alun Lenny, Cabinet Member for Resources, 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.”
He said social care, children’s services and education were all under intense pressure, with rising demand, higher placement costs, school overspends and growing levels of need among children and young people.
Cllr Lenny added:
“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. That is why it is important that our residents, visitors and stakeholders have their say on how we bridge this financial gap.”
Residents warned to expect higher bills and leaner services
Carmarthenshire’s leaders say the scale of the financial challenge means the coming year will bring “difficult and unavoidable” decisions, with higher bills for households and further pressure on frontline services.
The authority has already stripped more than £15 million from its spending through efficiencies and pension savings, but insists the remaining gap cannot be closed without a mix of cuts and a steep rise in council tax.
Councillors will now spend the coming weeks weighing up which services can absorb reductions and where the impact on residents will be felt most sharply. The final budget will be set in March, with the 6.5% council tax rise still on the table.
Well if they did not pay out millions in a stupid cycle path they would have enough money, it would be nice if the picked up our waste two weeks it has been
They fail to provide basic services now. The value for money and customer services are no -existent. Has there been a full, independent, audit of the Councils finances?