Budgets for councils in Wales are unveiled
Cash increases for schools and social services in Wales should be spent in full, directly on those departments, a minister has told councils.
Local Government Minister Carl Sargeant unveiled an average cut in funding for councils next year of 1.4%.
He said he wanted evidence £61m extra for schools and £35m more for social care was spent on those priorities.
Previously, councils have not spent all the money earmarked for those areas as intended.
There will be small rises in funding for local authorities in 2013 (0.2%) and 2014 (1.3%).
The Welsh Local Government Association (WLGA) said the settlement was probably as good an outcome as could have been expected.
Mr Sargeant has set aside £32m to fund a council tax freeze but said it was up to councils whether to implement a freeze.
He said the funding settlement, which sees individual councils receive between a 1.7% reduction and a 0.1% cash increase next year, was challenging.
"The funding I am announcing today is challenging as a result of the large reductions imposed on the Welsh Assembly Government's budget from the UK government," he said.
"However, it reflects the assembly government's priorities of protecting schools and social care and it represents a fair deal in the challenging economic climate that we find ourselves in.
"I am increasing the cash funding of local authorities over the three-year period. This is in stark contrast to the position in England where local government core funding shows a decrease of 2.3% on a like-for-like basis."
Ministers said at the time of the draft budget last week that they were able to give small cash increases in the day-to-day funding for the delivery of certain services, such as schools.
Revenue funding for social services and schools are currently paid to local authorities via the Revenue Support Grant (RSG).
But councils have not always spent all the money in full on those areas.
However, Mr Sargeant said on Tuesday the cash increases earmarked should be spent in their entirety, directly on those services.
The WLGA said it recognised the assembly government's "clear efforts" to protect Welsh communities by prioritising frontline services.
WLGA leader Councillor John Davies said: "It is important that the priority is now given to protecting the most vulnerable in our society, particularly in view of the welfare reforms that will start to be introduced from April next year.
"With one-third of the Welsh workforce employed within the public sector, our communities could be hit again."
He added that he welcomed "the recognition in the settlement of social services pressures as well as the protection of schools' funding".
The settlement for local authorities followed the assembly government's draft budget last week.