Annal Nayyar -One in ten councils ‘struggling with finances’, says Audit Commission

One in ten councils is struggling to deliver planned budgets, having either failed to make savings, overspent on some services or suffered shortfalls in income, according to the Audit Commission.

survey of auditors included in the report found that 89% of councils experienced no significant difficulties in delivering their agreed budget in 2012/13, and the majority (71%) did so without having to take unplanned actions.

However, among the 10% that auditors said struggled to deliver their budgets, failure to make adequate savings, rising cost pressures, weaknesses in financial control and uncertain prospects for future income were highlighted as factors.

Looking to the medium term, auditors said they were confident that around two-thirds of councils would be able to deliver their plans, but there were concerns about the medium-term prospects at more than a third (36%) of councils.

Audit Commission chair Jeremy Newman said: ‘With less income, councils continue to face risks to meet their legal obligations and the needs of their local communities.

‘When the Audit Commission has closed down, it will be for the government and others to find alternative ways to bring together auditors’ insights into the finances of English councils and to keep watch for signs of financial stress.’

CIPFA chief executive Rob Whiteman also noted that that the government has now dismantled bodies, such as the commission and the Standards Board, that were designed to improve council performance.

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