The people of Wales rely on our public services – we see their impact and delivery all around us in our schools, our hospitals, our homes, our environment, our communities.

Those services in turn rely on the skill, hard work and dedication of hundreds of thousands of public servants – frontline staff, politicians, senior leaders – whose motivation is to serve their communities and to improve the lives of others.

Services have been tested by two decades of financial pressure, demographic and social change, ever increasing demand, and wider challenges from climatechange, Brexit and global events. 

The COVID-19 pandemic rocked our society to its core and called for an unprecedented response. The residual effects of the pandemic are still with us today in the shape of pent-up demand for services and fundamental changes to society and behaviours.

There is much to reflect on and learn from the pandemic response, as we are still seeing played out through the UK public inquiry and wider scrutiny. However, we should recognise we also saw the very best of the public service in Wales during the response. 

Frontline workers continued their vital work, often under immense pressure; the NHS and local and central government collaborated to deliver life-saving initiatives such as the Test, Trace, Protect programme and mass vaccination; all parts of the public service adapted swiftly through remote working and service redesign to continue supporting their communities.

Though a dreadful time for so many, the response showed what can be achieved 
when public services are united around a clear, common objective and pulling in the same direction. We saw this too in how public services worked together to accommodate and support displaced Ukrainians arriving in Wales from early 2022 onwards, building on learning from the pandemic response.

But excellent service delivery is not just about responding to emergencies. The public have a right to expect it always and for the flexibility, collaboration and pace we saw in the pandemic to be standard. They should also expect that public money is well-managed and delivering good value.

In local government, budgets have been squeezed. Fast rising costs in areas like children’s services and temporary accommodation are bringing some councils to the very edge of financial sustainability.

Generally, we see councils having a sound grip on their immediate financial pressures but with many relying on reserves to balance budgets.This approach is unsustainable in the long run. Individual councils, and the sector as a whole must strengthen their long-term planning, forecasting and oversight if they are to remain financially viable.

In the NHS, the Senedd passed legislation in 2014 requiring individual health bodies to break even over a three-year period and to have medium-term financial plans that are approved by the Welsh Government. Yet despite these statutory expectations, most health boards have been unable to meet that break-even duty for several years.

Despite record levels of investment and ever-increasing levels of savings, health boards are struggling to control costs driven by rising demand for services, overall growth in pay costs, and other inflationary pressures. With most health boards still unable to produce financially balanced three-year plans, the overall NHS deficit position is unlikely to change for the foreseeable future.

Those financial pressures stimulate an understandable focus on short-term financial management. But this reactive approach hinders the longer-term planning and transformational changes that are needed to create more financially sustainable services.

This is all before we add into the mix wider pressures, for example around the investment needed to support policy priorities around decarbonisation, deal with the impacts of climate change, and help society adapt. I have reported previously that the scale of spending that might be needed in these areas, and where that funding will come from, remains unclear.

Against this backdrop, making the most of every pound of public spending is essential. The work of my office gives assurance that, overwhelmingly, public money is well managed. Many public bodies demonstrate strong governance and accountability. However, there is still waste, error, and fraud. 

Exercises like the data matching we facilitate as part of the UK-wide National Fraud Initiative are an important part of our counter fraud landscape. However, there is much more that public bodies need to do to raise their game in response to increasing fraud risks.

Demographic and societal change, and the lingering impact of the pandemic are driving ever-increasing demand.

In some important areas, service performance and quality are declining. My 2025 report on cancer services, for example, described a failure to meet key waiting time targets and growing inequalities in outcomes despite increased funding. These issues are compounded by workforce shortages, ageing infrastructure, and rising public expectations.

Simply allocating more funds does not guarantee a solution. Except for 2022-23, the NHS has seen large, above inflation increases in its funding in recent years yet still it is unable to break even and performance in many areas is unsatisfactory. And that ever-growing share being taken by the NHS undoubtedly squeezes the resource available for other areas.

That changing pattern of funding between sectors needs to be rebalanced if important services are to be sustainable, and better outcomes need to be achieved across the board with the public money that is available.

The public service delivery landscape in Wales is crowded. 

By way of illustration, my office audits the accounts of close to 100 larger public bodies and structures, even before considering other smaller bodies that I audit, notably the over 700 town and community councils. 

In addition, various partnership and collaborative arrangements exist to address the challenges and problems that cannot be addressed by individual organisations alone; for example, Public Services Boards, Regional Partnership Boards and Corporate Joint Committees. 

These partnership structures are of variable effectiveness – with some very good and others less so. They often work on differing geographical footprints and can have overlapping memberships and objectives. They each require contributions from many of the same players, so spreading available resource more thinly. 

While every one of our public bodies and partnership structures is no doubt rooted in a well-intentioned rationale, the combined effect is overly complex. 

That complexity leads to a system that can be fragmented and slow-moving, with overlapping responsibilities and unclear lines of accountability. This complexity can hinder transformation and make it difficult for citizens to navigate services or understand who is responsible for what. 

Our work also shows how many public bodies often fail to capture the service-user perspective. This affects service design, public understanding of lines of accountability, and the ability of service users to navigate what can be complex and poorly signposted systems.

I have growing concerns about declining trust and confidence in public services and governance structures across Wales. 

That is not unique to Wales and is fed in part by factors beyond our control – broader geopolitical and domestic political issues, societal changes, change in the way people access media, information and analysis, the public’s view of politics nationally and internationally. 

Some factors, though, are much more within our gift. 

To win and maintain public trust and confidence, we must consistently demonstrate public service delivery that is timely and of good quality. When outcomes are poor and are not seen to improve – or seen to worsen – it is unsurprising that the public loses confidence in the public sector’s capability. 

Not so much in the efforts of individuals and frontline services, but organisationally and system-wide. We know from our own work and wider evidence that poverty and inequality remain deeply entrenched in many communities despite the best efforts of local government and others. 

Similarly, my work in the NHS has shown that the failure to meet targets in key areas such as elective waiting times and ambulance handovers has sadly become the norm. This is demoralising for staff and will colour patients’ views.

A further factor, on which I have a direct line of sight, is governance. It might not sound the most obvious cause of low public confidence, but I believe it is important. The overwhelming majority of public sector organisations are well governed most of the time. 

Regrettably, though, I have reported on too many examples of poor organisational governance at every tier of the public sector – from the Welsh Government itself to the NHS, local government, some central government organisations, and the smallest tier of government in our town and community councils. 

I fear even a small number of such cases colour the public’s perspective of public sector governance in the round. These failures invariably feature some weaknesses in process such as poor record-keeping, application of policy, or a lack of transparency. 

But more significantly, in my view, many governance failures in public organisations are rooted not in process but in human behaviour. If those in the public sector, especially in positions of leadership, lose sight of the required values and behaviours, the effects are damaging. 

They manifest in the form of poor decision making, relationship breakdown, wasted public money – on settlement payments, legal or consultancy fees – and distracted organisational leadership and service provision. 

And every time the public sees such examples, it further undermines their confidence and trust: trust that is essential if the public is to support the kind of transformation required to make our public services sustainable for the long term.

The technology already exists to transform service delivery, reduce costs and 
improve the user experience. I recognise that the public sector is already working to 
improve its approach to realising benefits from digital solutions and identifying 
services requiring transformation.

This work must replace antiquated IT systems, improve the quality and shareability of 
data, recruit and retain scarce skills in high demand across the economy, and 
reshape service delivery with citizens and users at the heart. The challenge is 
considerable.

The potential efficiency gains in those services are enormous, with more modern and 
responsive public services delivering improved service to customers. However, I 
have also emphasised the importance of balancing spending on infrastructure with 
work to tackle the root causes of digital exclusion. And while artificial intelligence 
presents great opportunity, it is not without risk.

My work on councils’ digital strategies has revealed uneven progress. Only half of 
Welsh councils had up-to-date digital strategies, and many lacked robust 
arrangements for resourcing, monitoring, and evaluating impact.

In the NHS, digital transformation can be extremely slow and made more difficult by 
funding and capacity constraints, information governance challenges, and a lack of 
consistency on the ‘Once for Wales’ approach.

One prime example of these challenges can be seen in my previous reporting on the 
implementation of the Welsh Community Care Information System where, 
unfortunately, the reality of implementation did not meet the original ambition.

More specific and closer to home, my audit work could be made far more efficient 
and effective if the bodies we audit had modern systems for their financial and 
performance information. In many cases, bodies instead have ageing, unreliable 
systems that are difficult to interrogate or integrate.

Many systems are outdated and not fit for purpose, limiting the ability of 
organisations to manage operations effectively or provide timely, reliable data for 
audit and decision-making. This technological deficit hampers both assurance and 
accountability, and crucially the ability to modernise and join up services to make 
them more efficient and improve the end-user experience.

So investing in updated finance and performance platforms is not simply to benefit 
the auditor – that is a relatively marginal matter. The more important question, and 
what should be front of mind for senior leaders, is how can they expect to run well-governed organisations, and take informed decisions, without them? 

Outdated systems can also increase cyber-security risks, something public bodies cannot afford to be complacent about.

Workforce pressures are a recurring theme across my work. 

In all sectors and many specialised areas, staffing challenges – exacerbated by rising demand – have strained service delivery. 

Examples from our work include capacity and capability challenges within the Welsh Government’s civil service, pressure resulting from recruitment and retention challenges in the NHS and education, and in other specialised areas such as digital transformation, planning, active travel, building safety, and flood defence. 

We see in our audit of accounts work too that many organisations are struggling to recruit and retain high quality finance professionals. This is concerning, and not just because we need these people to help produce good quality sets of accounts but because the finance profession has an important role to play in plotting a path to a more sustainable future for our public services.

Competition for specialist skills is inevitable, even within the public sector, and there will always be questions for public bodies to ask themselves about what they do in-house and what could be done by other organisations. 

But there needs to be a stronger approach to developing coherent workforce strategies, aligning staffing models with future service needs, and developing staff accordingly. 

Without this, policy ambitions risk being undermined by operational constraints.

The efficient maintenance and improvement of existing assets such as roads, hospitals, schools and flood defences is every bit as important as getting value for money in building new infrastructure. After all, new assets will only deliver promised benefits if they are properly maintained. 

All too often our work has highlighted the false economy of allowing maintenance backlogs to build up. Not least within the NHS where challenges with an outdated estate can drive inefficiencies, cost and impact negatively on patient care. 

So a disciplined approach to asset management, for each part of the public estate, is an essential component of the change we need to see. 

Overall, the Welsh Government spends more than £3 billion a year on infrastructure, although a lot of that is delivered through other public bodies. My recent review of how the Government is managing that significant spend shows clear effort to align it with wider strategic outcomes. 

But these benefits will not magically materialise. It will need a concerted effort to line up the machinery of government – baking these benefits into plans from the outset and ensuring they are delivered over the longer-term. 

These issues are within the Welsh Government’s gift to put right but rely on a sustained improvement in programme and project management that has not been achieved to date. 

The underlying weaknesses in some of these basic building blocks of our public service contributes to the second area where I believe change is required, namely productivity and value for money in the public sector.

In the face of rising demand pressure and ever-more stretched budgets, improving productivity and delivering better value for money is essential. 

Our work points to some of the productivity challenges for the public sector, especially in the NHS where outputs in terms of activity have not increased in proportion to additional inputs in terms of money and capacity in areas such planned care. 

I am sure that leaders across the public sector share an ambition to make a step change in productivity. There’s enough evidence from the positive examples we have found in our work to be confident that significant amounts of public money can be freed up. But it will take a disciplined, focused, cross-government approach over several years to fully realise the potential and make the exceptional the norm. 

Hence, my reports consistently highlight that VFM is not just about spending less, it is about making the money we do have work better. 

A good example is the number of people who are in hospital awaiting discharge. While there has been some recent improvement, the picture across Wales remains challenged, absorbing huge costs and adversely affecting patient flow and the optimal rehabilitation of patients. 

Many discharge delays are a result of waiting for social care support, often linked to funding and resource pressures in local authorities. Better funding to increase social care capacity would therefore free up significant NHS resource and represent a cost-effective way of improving patient experience and outcomes. 

In a context of constrained budgets and rising demand, public bodies must focus on outcomes, not just outputs, and ensure that every pound spent contributes meaningfully to public well-being. 

At a very basic level, our work shows that too often public bodies lack reliable data with which to assess value for money and are unclear as to the outcomes they are looking to achieve. My work on Active Travel, for instance, demonstrated how the Welsh Government itself is unclear about how assessment of its policy is to be achieved. As a result, significant sums had been invested without a robust means to assess its effectiveness and value for money. 

And I have reported previously on how the Welsh Government had not done enough to ensure its investment in affordable housing contributes to wider policy objectives and to be able to tell a clear story on that front. Many public organisations struggle to report on outcomes effectively. 

Performance tends to focus on outputs—such as the number of services delivered—without evaluating the difference those services make. It is vital too that the public sector views value for money through the lens of the Well-being of Future Generations Act, which requires public bodies to consider long-term impacts, prevention, integration, collaboration, and involvement. 

As I have emphasised through my reporting on implementation of the Act, we cannot afford for public services to design solutions that do not meet people’s needs, burden future generations with avoidable higher costs, or miss opportunities to deliver more with the same or less. 

That much sharper and relentless focus on the delivery of value for money also requires a mindset shift to one focused on prevention and the longer term.

Public Health Wales has estimated that for every £1 invested in public health interventions, there is a return of £14. 

This includes reduced demand on hospitals, social care, housing, and emergency services. 

But too often, public services operate in crisis mode, responding to immediate pressures rather than planning for the future. This short-termism is reinforced by annual budget cycles, reactive funding decisions, and political incentives that prioritise quick wins over sustainable outcomes.

The Well-being of Future Generations Act provides a legislative framework to do something different – to act for the long-term and to act preventatively by addressing the root causes of issues, rather than dealing with the symptoms. 

However, I have highlighted recently some prime examples where public bodies have been struggling to make a meaningful shift towards prevention, as evidenced for example in my work on cancer services and on how councils are managing temporary accommodation demand.This is despite there being clear evidence that investment in prevention makes sense from a value for money perspective. 

Though Wales has an overarching, legislative framework to drive a longer-term, preventative mindset, our work suggests it is not yet doing so. 

One of the challenges with prevention is that benefits take time to materialise. This lag can make prevention politically and operationally difficult, especially in a climate of financial pressure. However, the long-term gains—in health, well-being, and cost savings—are substantial and well-evidenced. 

The Welsh Government has a critical role in enabling prevention. This includes setting coherent policy frameworks, aligning funding mechanisms, and creating incentives for collaboration. It must lead a shift towards long-term financial planning, integrated delivery models, and cross-sectoral working. 

This means breaking down silos and ensuring that prevention is a whole-of-government priority. Prevention cannot be achieved through isolated programmes. It requires a more radical, whole-system change and joined-up working between a range of agencies such health, social care, housing, education, and the third sector, with aligned accountabilities and funding streams and shared outcomes. Prevention must be embedded not just in strategy documents, but in everyday decision-making, budgeting, and service design. 

Without this any policy aspirations around prevention risk becoming more rhetoric than reality.

As noted earlier, the current landscape of Welsh public services is characterised by a web of organisations, partnerships, and governance structures. The cumulative effect is a system that is fragmented and difficult to navigate. 

While it is not for me to blueprint the alternative, I am clear on the need to simplify and avoid further complexity. If starting from a blank sheet of paper, we would surely not design the arrangements we currently have in place. 

Reducing complexity is not about dismantling collaboration but about streamlining it. We need fewer, clearer structures with well-defined and sharper lines of accountability. This is also not simply about rationalising the number of public bodies or making their collaboration with each other more effective. 

Reducing complexity and strengthening integration and collaboration applies just as much to the internal functioning of public organisations. These are expectations set by the Well-being of Future Generations Act where our work demonstrates much more needs to be done. Citizen-centred design must underpin this simplification: services should be organised around the needs of people, not the convenience of institutions. 

This means engaging communities in shaping services, using plain language in communication, ensuring that performance information is meaningful and accessible, and considering the equality and other impacts of decisions. It also means being honest with the public about what constitutes safe and affordable public service provision, especially in relation to health and care services. 

A simpler, more streamlined public service in Wales would also help breakdown silos within and between sectors and support better sharing and embedding of good practice. The latter is something that Wales seems to struggle with and all too often my work points to unexplained and often unacceptable variation in performance across different public bodies. 

This is despite our relatively small size and the close connections of many in the public sector. When good practice is established in part of the public sector, a more robust approach to ‘adopt or justify’ elsewhere may be required. 

As Auditor General I see complexity manifested in other ways, including through our annual audit of the accounts of public sector bodies. A dry topic to some, this work is essential if the public and the Senedd are to have an accurate and timely picture of the state of the public finances. For individual organisations, that accuracy and timeliness are essential if good decisions are to be taken. 

For our local authorities, for example, the financial regime in which they operate is becoming increasingly technical with disproportionate emphasis on things like asset valuations and pension liabilities. Important, but obscuring what truly matters to users – councillors, officers, the public – namely, how public money is spent and the value it delivers. 

I see some particular challenges emerging in this area which, if not addressed, will quickly weaken the overall financial regime and lead to poor decision making and a reduction in transparency.

Addressing the areas I have mentioned will require political and executive leadership.

 That means being honest about the scale of change required, making difficult decisions, and communicating clearly the necessary trade-offs. It also means modelling the behaviours we want to see: integrity, collaboration, and a relentless focus on outcomes. 

The Welsh Government has a pivotal role to play in enabling this transformation. It is our system leader, sets the tone, and provides the legislative and financial frameworks within which other public bodies operate. 

While the Welsh Government does much that is good, too often I find myself reporting that it needs to be clearer and firmer in its system leadership. My work has also highlighted examples where the Welsh Government can do more to support implementation of legislation it has introduced and follow up on whether it is being implemented effectively and having the desired impact. 

It must provide clarity and coherence across policies, funding, and accountability frameworks. Mixed messages – such as promoting prevention while incentivising short-term performance targets – undermine progress. 

This has been my central message in much of the work we have done around the Well-being of Future Generations Act. So that, for example, the expectation on organisations to plan and act for the long term and with prevention in mind, is not undermined by funding decisions, target setting, and accountability frameworks that incentivise the opposite. 

I recognise the intense pressures faced by public sector leaders. These are difficult jobs. It is testament to them that our work often highlights examples of good practice where leaders have taken bold decisions in difficult circumstances. 

But as noted already, my work on governance and transparency has also shone a light on the small number of cases where leadership fails to uphold the desired values. The result can be costly, public confidence erodes and service effectiveness suffers. 

The challenges facing Welsh public services are complex and systemic. They cannot be solved by technical fixes or incremental change. They require bold decisions, honest conversations, and a shared commitment to doing what is needed.