Over the spring and summer of 2024, we looked at the financial sustainability of each of the 22 councils in Wales. We focussed on:
- the strategies to support councils’ long-term financial sustainability;
- Councils’ understanding of their financial position; and
- Council’s reporting arrangements to support regular oversight of their financial sustainability
To be financially sustainable, a council needs to provide the services required of it, by law and expectation, within its available resources over the long-term.
Given the scale of the funding pressures facing local government, many councils require a transformative shift in approach to move beyond setting an annually balanced budget to achieving value for money and financial sustainability over the medium-term. This follows a period of unprecedented financial pressures for the public sector since 2008.
We heard from some councils that national issues or processes make financial planning more difficult. These included concerns relating to the local government funding formula and funding settlement, and the increasing responsibilities being placed on councils.
We have also published an update to our Local Government Financial Sustainability Data Tool which includes comparative data on councils’ levels of financial reserves and borrowing.
