Welsh councils could miss medium-term savings targets

The auditor general for Wales stated in a report out today that the majority of councils in Wales have improved their medium-term financial plans, which have given them an effective approach to forecasting the savings they need to achieve.

However, more needs to be done to bridge the funding gaps they have identified.

The report states “Medium-term financial planning in councils is generally effective but shortcomings in savings planning present a risk that some councils will not achieve the savings they need to make.”

The report, Savings Planning in Councils in Wales, follows up work conducted in 2015-16 and focuses on how councils identify, plan for and deliver savings.

This included examining councils’ financial planning arrangements, the extent to which they achieved their 2015-16 savings plans and the work undertaken to ensure robustness of their 2016-17 approach.

The report found that over half of councils had well-considered and effective savings plans for 2016-17 but the others did not, and they could fail to achieve their in-year savings targets.

The main reason why specific savings plans were not achieved was related to overambitious savings targets that were not underpinned by robust delivery plans.

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.”