Investment in third sector services increasing but local authorities in Wales not making best use of the third sector

Wednesday, January 25, 2017 - 3:41pm

There's a need to ensure they are securing value for money and developing a more strategic working relationship, says Auditor General.

Local authorities in Wales are not always making the best use of the third sector and must do more to ensure that the work they are currently doing continues to secure value for money. This is according to a report released today by the Auditor General for Wales.

In recent years, local authorities have had to find new ways of maintaining services in the face of reductions in public money and have consequently increased their funding of other providers, particularly the third sector, to deliver key services. Research by the Welsh Government and the Wales Council for Voluntary action, highlighted in the report, found that the third sector in Wales consists of some 32,500 different organisations, 230,000 trustees, 1.3. Million volunteers and some 51,000 employees. The report also found that the third sector’s work with local authorities is growing, pointing to data published by the Local Government Data Unit, the report highlights a 165.5% increase (from £68.7 million in 2001-02 to £248.8 million in 2013-14)  in the amount awarded by local authorities to the third sector.

Despite this growth, inconsistencies in local authorities’ arrangements for funding the third sector make it difficult to demonstrate value for money from this increased investment. The report highlights the need for authorities to develop a clearer rationale for why they are working in partnership with the sector and to be clear about how these partnerships support them to deliver their corporate priorities. The report also assesses how efficient and effective local authority funding arrangements for third sector organisations are. Poor systems and arrangements for awarding and allocating monies to the third sector currently impose heavy burdens on organisations.

The report includes a self-evaluation tool to assist authorities in planning, managing and overseeing their work with the third sector. This self-assessment has been provided to authorities to help address the findings of the review and improve how they use their resources and work with the third sector. The report also makes a number of recommendations for both local authorities and the Welsh Government including:

  • that the Welsh Government provides guidance and assistance in clarifying expectations of local authorities in light of recent legislative changes such as the Well-being of Future Generations Act; and
  • that elected members play a key role in scrutinising the checklist and provide regular challenge to help their authority address gaps and weaknesses. 

Auditor General, Huw Vaughan-Thomas said today:

“Wales needs a strong and effective relationship between local government and the third sector. With the likelihood of more services being delivered jointly in the future, we must ensure that partnership and funding arrangements are effective, efficient and are well run and continue to meet the needs of the many thousands of people who use and depend on them. The recommendations in my report and the self-evaluation checklist provide local authorities with the tools they need to review and strengthen their joint work with the third sector and continue to serve the needs of the citizen both now and in the future.”