The assembly government says it has responded to council concerns

Finance Minister Andrew Davies said "real improvements" would result from a further �32m for early years education.

Mr Davies said �4.7m extra for councils meant all would get at least 2% more central government cash from April.

Local councils said the budget's publication was "little more than an exercise in window dressing".

Mr Davies said: "The final budget allocates additional funding...to ensure that all local authorities will receive an increase in assembly government funding of at least 2% next year, bringing the average increase up to 2.4%."

Under his draft plans, Powys was set for a 1% increase, with central funding for Anglesey, Blaenau Gwent, Conwy, Gwynedd and Newport originally due to rise by less than the 2% floor now set by the minister.

The position for front line services is particularly daunting Derek Vaughan, Welsh Local Government Association

In a statement Mr Davies said that he wanted more efficiency from authorities.

"We will be working with local government to simplify funding arrangements, target areas of underperformance and develop minimum standards of service delivery across Wales," he said.

Mr Davies said a further �14m in the financial year 2009/10 and �18m in 2010/11 to cut class sizes meant there was "substantial new investment in Welsh schools which will deliver real improvements in early years education, where the long-term benefits are greatest".

He explained that, over the next three years, assembly government spending would reach �16bn, more than double the �7bn when the assembly was created in 1999.

The changes he had made, he said, resulted from consulting "widely" on the financial proposals.

Hobson's choice

Welsh ministers had warned "tough" decisions were needed due to less cash coming to them from the UK Government.

Whilst expressing satisfaction that no council would receive less than 2% extra assembly government money, the Welsh Local Government Association (WLGA) said it was "sad" the association's warnings "had not been heeded".

Leader Derek Vaughan warned: "We face a significant range of difficult choices ahead - it is, however, a 'Hobson's choice' since the only alternative to raising council tax is to cut services.

"The position for front line services is particularly daunting with the gap between education funding in Wales and England widening," he added.

Powys council said the "change of heart" by the assembly government was "good news" but maintained the local authority still had a "difficult task balancing its annual budget".

Liberal Democrat assembly finance spokesperson Jenny Randerson agreed ministers had "merely tinkered to offset the worst aspects" of the local government deal.

Conservative assembly group leader Nick Bourne said "the few changes made to the dismal draft budget have done nothing to disguise the fact that we are facing some serious belt-tightening over the next three years".