Most councils in Wales have improved their medium-term financial plans and their ability to forecast the savings they need to make, according to financial watchdogs.

But the auditor general for Wales also says authorities must do more to plan how they intend to bridge the gap between income and spending that they have identified.

The report, Savings Planning in Councils in Wales, warns that more than half of councils have ‘well-considered and effective savings plans’ for the current year but others they may fail to achieve their in-year savings targets.

It says the main reason for non-achievement of savings was over-ambitious targets which were not underpinned by robust delivery plans.

Councils used a variety of methods to balance their budgets which included use of reserves, underspends from within the other service areas, and unplanned income.

Auditor general Huw Vaughan Thomas said: ‘Welsh councils have generally managed to reduce expenditure and balance their budgets in line with austerity measures since 2010.

‘However, the scale of annual budget reductions is likely to continue, so I hope that councils will consider the recommendations laid out in this report, and those included in their specific local reports, to offer realistic and robust savings proposals and meet continued reductions in funding.’