A £19 million shortfall is being predicted by Powys County Council in its budget for next year.
The authority says it will have to make "difficult choices" as it looks ahead to the 2026/27 financial year.
Growing demand for services, inflation pressures, and pay increases are all contributing to its "significant financial challenges".
It comes despite an increase in funding from the Welsh Government, which was confirmed today, as a 2.3 per cent uplift in the Revenue Support Grant.
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Cllr Jake Berriman, Leader of Powys County Council, and Cllr David Thomas, Cabinet Member for Finance and Corporate Transformation, said: “Although our provisional local government settlement from the Welsh Government has increased, it does not fully meet our rising expenditure.
“Growing demand for services, inflationary pressures, and pay increases for teachers, care workers, and other staff mean we face difficult choices as we work towards setting a balanced budget for 2026-27,” they continued.
The councillors noted that the authority has delivered £52 million in savings over the last five years, but emphasised that additional measures will be necessary.
“Raising council tax alone will not cover the gap. We must review which services can be sustained and continue to transform how we deliver them to ensure financial stability while meeting residents’ needs,” they stated.
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In September, the council predicted a surplus of just under £2.2 million by the end of the current financial year.
But this was on the back of the £10.135 million in cuts and efficiencies that have had to be made.
At that time, Director of Corporate Services, Jane Thomas, said that a budget gap of £39 million still needed to be plugged over the next four years.
She noted overspending in children's services, highways, transport and recycling, and school improvements during the current 2025/26 financial year.
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