Labour’s Cabinet Members in Powys are urging the Welsh Government to introduce a ‘Rural Premium’ to help cover the increased costs of delivering services in rural areas.

This comes following last week’s announcement of the Welsh Government’s draft budget for 2025/2026.

The average rise throughout Wales is set to be 4.3 per cent but Powys is set to receive 3.2 per cent, which equates to £7.770 million more, but puts them near the bottom of the Welsh funding league table, 21st of 22 local authorities.

This means that the total Welsh Government grant to the council will rise to £250.184 million, up from £242.414 million.

Powys has been joined by other councils like Gwynedd (3.2 per cent) and Monmouthshire (2.8 per cent) at the bottom of the funding pile while councils for urban areas like Cardiff (5.3 per cent) and Newport (5.6 per cent) have benefited the most out of the increased government funding.

Powys County Council last week said the increase is insufficient in meeting current pressures and "difficult decisions" will need to be made to deliver a balanced budget - pointing towards potential changes to service delivery and an increase to council tax.

Today, Labour’s Powys Cabinet members - Cllr Matthew Dorrance, Cllr David Thomas and Cllr Sandra Davies - have written to the Welsh Government to ask that a ‘Rural Premium’ be considered.

This would be paid outside of the funding formula, to help meet increasing costs and help secure the delivery of services in rural Wales. Deputy Council Leader Cllr Matthew Dorrance said: “The draft Welsh budget shows a commitment to public services but the costs of delivering quality public services in rural Wales are higher.

“We are seeking a premium outside of the Local Government Funding Formula for rural councils in recognition of the unique pressures these councils face due to rurality.”

The letter has been addressed to Eluned Morgan MS - First Minister of Wales, Huw Irranca-Davies MS - Deputy First Minister and Cabinet Secretary for Climate Change and Rural Affairs, Mark Drakeford MS - Cabinet Secretary for Finance and Welsh Language, and Jayne Bryant MS - Cabinet Secretary for Housing and Local Government.

The letter warns that the rural nature of Powys “is not adequately reflected within the funding formula or the provisional settlement” and calls for a ‘Rural Premium’ to be added, something they argue would better reflect the costs associated with rural service delivery.

Cabinet Member for Finance and Transformation Cllr David Thomas said: “Unfortunately, the proposed increase in funding will not meet the severe pressures the Council is currently facing in its demand for services. This is exacerbated by the increased costs of service delivery in rural areas.”

Future Generations and Welsh Language Cabinet Member, Cllr Sandra Davies added: “Powys covers a third of the land mass of Wales, to travel from one end to the other can take over four hours, just north to south. The ability to have members of staff strategically placed can help reduce costs in both time and travelling.”