‘Significant’ risks facing Welsh councils’ finances are likely to increase unless action is taken, a public sector watchdog has warned.
Analysis by Audit Wales of the nation’s 22 councils this year concluded there must be a ‘transformative’ shift from setting annually balanced budgets to achieving value for money and financial sustainability over the medium term.
Councils know the scale of their funding gaps but do not have long-term plans to address them, leaving them vulnerable to short-term decisions that may not achieve the best value for money, the watchdog found.
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.
‘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.’
