The final four posts on local government and independence start with a look at money.
Firstly, a word of warning.
Due to the current perilous state of the UK’s public finances – and the incompetence of the last several UK governments – it would be difficult for anybody, let alone me ( without a university economics department or privately-funded think tank at hand) to make any projections on Welsh local government finances for the foreseeable future other than to say “things are looking a bit shit”.
I know full well when to cede to others’ knowledge of public sector economics.
So this post is more about policy options than spreadsheets and graphs. So it all comes with a healthy pinch of salt.
The function of auditing is to ensure that public bodies are in full control of their finances and provide value for money.
Most public bodies in Wales – including local authorities – already have to submit accounts to Audit Wales annually. You would expect this to continue regardless of how local government is (or isn’t) reformed.
It’s not controversial to suggest that Audit Wales would carry on as is too. Most developed nations have a dedicated auditor or audit agency. Wales would still have an Auditor General and the role and functions of Audit Wales would remain unchanged.
The Audit Wales workload could be reduced if community councils were scrapped and replaced with more empowered municipalities (my preferred option – Part V and this map). Instead of having to deal with more than 700 community councils, they would only have 53 or so municipal councils to audit. This may – stress may – lead to more detailed auditing and issues being picked up sooner.
Most of the possible changes here would be administrative.
That could include following Scotland’s example and having an Accounting Commission to deal with the auditing of elected body accounts. Changes to the structure of Audit Wales could include appointing regional Chief Auditors to build relationships with municipal councils and the provinces.
Minimum standards could be set for the presentation of accounts and the detail provided. There’ve long been complaints at Senedd and local authority level that the level of detail in budget documents varies; sometimes an entire department’s spending may be included as a single line rather than broken down into individual elements.
The only other administrative change I can think of is that municipal (or town/community) council finances would need to be managed by a qualified treasurer (i.e. a chartered accountant or accountancy firm), not a Clerk.
A star rating for councils?
This is just an option, but there needs to be an incentive for public bodies to stay on top of their finances. This could be through a “star rating” or traffic light system for all bodies subject to public audit.
Councils with a good audit rating could access additional credit/borrowing, be looked on more favourably when applying for central government grants and can be trusted to act as an agent for a higher tier of government (i.e. deliver housing or social care on behalf of the provinces or Welsh Government).
Councils with a poor audit rating may have gradual intervention imposed. This could range from follow-up audits/an action plan (in less serious cases), to special measures and the appointment of central government commissioners to run them in the worst-case scenario.
