Third sector must bring value to Welsh public services, says WAO

26 Jan 17

Local authorities in Wales working with charities and voluntary organisations must do more to demonstrate they are receiving value for money, the auditor general for Wales has said.

The Wales Audit Office concluded that reliance on the third sector was growing, but the quality of oversight and scrutiny of such partnerships needed to improve.

In light of budgetary cuts, Welsh local authorities have increased their funding of external providers in order to deliver key services.

According to figures from the Local Government Data Unit cited in the report, there has been a real-terms increase of 165.5% in the funding awarded by local authorities to the third sector through grants and contracts in the last decade. In 2001-02, this figure was £68.7m, but it had grown to £248.8m in 2013-14.  

Funding of social care services makes up the lion’s share of funding provided by local authorities to third sector bodies, although as a proportion of overall spend it has fallen from 71.4% in 2001-02 to 61.9% in 2013-14.

A key finding of the report was that authorities “needed to develop a clearer rationale” for why they are working with the third sector and how these partnerships “support them to deliver their corporate priorities.”

Also, few local authorities have a comprehensive strategy based on good quality data to drive their decision-making and activity, auditors noted. Moreover, at present, poor systems for awarding and allocating funds to the sector “impose heavy burdens on organisations”.

“We found that performance management arrangements are too inconsistent to provide an adequate level of assurance that services are working well and resources are being used effectively,” stated the report.

The report included an evaluation tool for local authorities provided by the auditor general and the Wales Audit Office, designed promote effective engagement with the third sector. Additionally, the auditor called on the Welsh Government to issue guidance and assistance in clarifying the expectations on local authorities in this area.

Commenting on the findings, auditor general Huw Vaughan-Thomas said: “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.

He added: “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.”

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