Council's financial planning is strengthening

17 Aug 2016 - 3:33pm
A leaf growing out of a tree

But there is still scope to improve the way savings are identified and delivered.

Welsh councils are going through a period of sustained funding reductions, which is having an impact on their ability to deliver key services to the public. Our latest report looks at how financially resilient the councils are in managing their finances and planning future changes. 

The report looks at the quality and effectiveness of current financial planning, control and governance arrangements of the 22 councils in Wales. Taken together, these areas of performance have enabled Auditors to judge how financially resilient councils.

The report highlights that:

  • financial planning processes are ‘strengthening’, but there is scope to improve how savings are identified and delivered;
  • there are good systems in place that help ‘manage and control’ finances, however spending within budgets is proving to be a ‘challenge’ for some authorities; and
  • governance arrangements are ‘mostly sound’ but engagement of councillors and the effectiveness of decision making in respect of savings are ‘inconsistent’ 

This report builds upon our earlier review in 2014-15 and reinforces areas where councils need to strengthen current performance. The report also identifies some key areas for improvement and recommends that councils and Welsh Government should:

  • strengthen financial-planning arrangements;
  • develop corporate wide income generation and charging policies;
  • ensure they have a comprehensive reserves strategy;
  • strengthen performance management arrangements to support delivery of medium term financial plans ;
  • have robust and accurate savings plans; and
  • ensure they have the corporate capacity and capability to support effective management of finances.

Auditor General for Wales, Huw Vaughan Thomas said today:

“Councils in Wales are facing significant financial challenges. The continued impact of austerity and reductions in public monies, coupled with the unclear implications of ‘Brexit’, require councils to continue to cope with uncertainties. Whilst I am pleased to see councils making progress in strengthening their financial planning, they need to do more in response to the challenging environment and our recommendations to both authorities and Welsh Government will help councils move forward and ensure that services are run as efficiently as possible.”