THE local government settlement announced yesterday was pretty pitiful and it’s hardly surprising there are already worries over how services will be affected.

Local councils in Wales will get an average 2.9% cash increase in Assembly funding next year.

This is far below the current inflation rate of 5.2%.

Blaenau Gwent Council will receive one of the lowest settlements at 1.5% while Newport will get 2.5%, Torfaen 2.4%, Caerphilly 2.7% and Monmouthshire 3.7%.

Ministers tried to spin it as best they could saying projections indicated inflation will fall sharply next year.

But there is no getting away from the fact our councils face extremely challenging times in 2009.

It’s all very well the Assembly promising to work with local authorities t ensure the money is "used most effectively and efficiently".

But with such limited resources, how exactly do they expect this to be achieved?

Of course these are difficult financial times for everyone but handing out well below inflation funding to councils will simply leave authorities looking for cuts, cuts and more cuts.

Cue a rise in council tax, which is bound to happen to help bridge this gap in council funding.

The taxpayer will find any rise very hard to swallow, particularly when we learned this week of some of the huge amounts some councils had tied up in Icelandic banks.