Auditors fear for future of Welsh public services

16 Mar 10
Spending cuts mean Welsh public services could run out of money unless there is urgent reform, according to auditors
By Paul Dicken

16 March 2010

Spending cuts mean Welsh public services could run out of money unless there is urgent reform, according to auditors.

The Wales Audit Office today published A picture of public services, a wide-ranging report looking at the challenges facing the public sector in Wales and lessons learnt over the past five years. It says the scale of real-terms reductions in spending remained unclear but could be £1.5bn over three years, with ‘significantly sharper reductions not unthinkable’.

The report says public services need to take action now. Interim auditor general Gillian Body told Public Finance that there were uncertainties about future spending but organisations should start looking at how services are provided to achieve the same outcomes for less cost.

‘We don’t know whether some streams of funding are going to be particularly targeted. If the UK government pours money into defence, you can see Wales facing harsher cuts. If funding goes into devolved areas, then Wales could be in a better position,’ she said.

‘But I can’t underline enough how challenging public services are going to find this. Since devolution... public services haven’t seen anything like it.’

Body said top-slicing budgets risked affecting ‘people who need services’ the most. Public bodies needed to be clear about what a service was doing and rethink how a service is provided, she added.

As well as central funding constraints, local authorities predict further losses, including a decrease of £35m on income from investments for 2009/10 compared with 2008/09.

The report also says councils have struggled to demonstrate how £600m efficiency savings have been achieved in the past five years.

The WAO believes public services need to collaborate more to prevent frustration for service users and reduce wasted resources. Body said collaboration between organisations had not been ‘straightforward’ but the imperative was there. She also said Wales’ small size could be an advantage for the ‘ability to pull people together’.

The WAO have also teamed up with Audit Scotland and the Northern Ireland Audit Office to develop an ‘efficiency check list’ for organisations, which Body said would help public bodies focus more on results.

Jonathan Morgan, chair of the Assembly’s Public Accounts Committee, said the report was a ‘must-read for the entire public sector in Wales as it faces its biggest challenge for at least a generation’.

Morgan said public bodies could not expect to ‘muddle through by doing the same things with less money’.

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