A report published by Audit Wales in December argues there is a need for action to ensure that local authority budgets in Wales are sustainable. According to Audit Wales, there are significant financial risks facing local authorities and the report notes that these are likely to increase without interventions to remedy the situation.
The research that serves as the foundation for the report was conducted in the first half of 2024. The work looked at each of the local authorities in Wales focusing on:
- The strategies in place to ensure long term financial sustainability.
- Local authorities’ understanding of their financial circumstances.
- Local authority reporting practices in order to support regular oversight of their financial sustainability.
According to Audit Wales, in order to ensure that they are financially sustainable and ensure their statutory obligations in the long term, many local authorities must change their ways of budgeting and focus on value for money and sustainability in the medium term.
In a statement the Auditor General, Adrian Crompton said:
“Councils have taken difficult decisions to manage their finances through a long period of financial constraint. But as the cumulative impact of that restraint builds we cannot assume that local government will remain financially sustainable. Our work shows that, while councils know the scale of their funding gaps, they do not have longer term plans in place to address them. This leaves them vulnerable to short term decision making that may not represent value for money or be in the longer-term interests of local communities. Put simply, local government is financially unsustainable over the medium term unless action is taken, by those who support and interact with the sector as well as councils themselves. Though a difficult message, I hope that this report helps councils, the Welsh Government and all of those committed to the sector, to chart a path to a sustainable future.”
You can read the report in full by following this link to the Audit Wales website.
