Councils: ‘Get a longer term grip on the financial challenges ahead!’

27 Jan 2014 - 7:20pm

Auditor General for Wales calls for better planning, evaluation and less of a short-term focus, as ‘cracks beginning to show

Councils in Wales have been able to meet the financial challenges so far – despite considerable pressures - but the cracks are beginning to show. In his report, published today, the Auditor General for Wales says local authorities will become increasingly reliant on having robust and appropriate arrangements in place to deliver efficiency savings, but that currently many do not have them.

The report Meeting the Financial Challenges Facing Local Government in Wales provides an overview of the extent to which councils in Wales are responding to the financial pressures they face. It concludes that many do not have sufficiently clear and realistic plans in place that are necessary to help deliver efficiency savings; councils are not routinely basing their strategic plans on sound and appropriate financial information; and that not all councils are effectively monitoring and evaluating progress in delivering their strategic plans.

Auditor General for Wales, Huw Vaughan Thomas, said today:

Local government in Wales has had a more generous settlement than England recently, but now faces sharp reductions in funding. That is coupled with pressures from a growing, and ageing, population – with rising demands in areas such as social services, education and waste.

All of this spells trouble for local authorities if they do not have robust, longer-term, strategies in place which are linked to medium term finanical plans. Too many councils are falling short and running out of time. I urge them to follow the recommendations, and practical advice and tools, contained in my report.

While most councils are clear about the level of efficiency savings they need to make, the report says many are less clear about how they will manage with fewer resources and are not developing sustainable approaches to finance their priorities.

The report also says many councils don’t engage effectively with others and they don’t robustly assess the potential impact of proposed savings or changes to services. It adds that strategic plans are not always effectively supported by departmental or service plans. Councils are also not routinely considering whether other organisations, or partnership arrangements, could provide activities or services more effectively.

But there are some examples of good practice out there and the report highlights a number of case studies where local authorities are doing things effectively and differently. It also provides a very detailed Appendix with guides and checklists to help council officers and elected members.

In all, the report makes 6 recommendations for improvement, including calls for councils to:

  • Develop clear strategies and plans, showing what they want to achieve and how they intend to achieve it.
  • Link plans and strategies closely with longer-term financial plans.
  • Explore more opportunities to work together, and with other public services, to reduce costs and deliver improved outcomes for citizens.
  • Strengthen arrangements for evaluating the impact of financial decisions - or service standards - on citizens.

Last week the Commission on Public Service Governance and Delivery (the Commission) published its report on public service provision in Wales. The Commission’s overarching conclusion is the urgent need for fundamental changes to structures, roles and programmes across the Welsh public sector. But, it also highlights the need to strengthen the arrangements that will be critical enablers of success. Our report explores some of those enablers of success in relation to local government in Wales. But the themes we explore and the recommendations we make are likely to be equally valid to all public services.