SWANSEA Council needs to be better at following through on planned savings despite shrinking costs by tens of millions of pounds, according to auditors.
The Wales Audit Office (WAO) said the authority had faced “significant real-terms” budget cuts in some service areas in recent years but did not have a good track record in delivering planned savings.
The WAO’s report from March said the council had overspent in the past three years at departmental level and would have to control its use of money held in reserves to balance the books.
But it said there had been an improvement in managing expenditure of late.
The WAO’s financial sustainability assessment was due to be discussed at a remote audit committee meeting on May 26, but it was postponed.
The council has reviewed all its services in recent years – from parks to leisure centres, social care to waste collection – as dwindling real-terms funding and rising demands have kicked in.
Council leader Rob Stewart, who was due to address the meeting, said departments may not have always delivered planned savings but had come up with other ways of breaking even or delivering surpluses.
“In 2018-19 we were within £2,000 of planned savings; in 2019-20 we’re in positive territory,” said the Labour leader.
He added: “The pace and scale of austerity has meant we’ve had to change services faster than we could actually deliver the savings.”
The WAO report said the overall revenue position at the end of 2017-18 was a £500,000 overspend followed by a £300,000 surplus the next year.
The authority is aiming to save a further £9.7 million this year from its £470 million revenue budget – and has identified a £34.3 million shortfall in the following three years.
It is legally obliged to balance the books every year, and has had to use some money held in reserve to achieve this.
But Cllr Stewart said the authority had built it up its pot of usable reserves, and put money aside to fund borrowing costs for capital projects.
The WAO said total borrowing will have risen to £614 million in 2023 which, despite the huge sum, would be £68 million less than the maximum allowed.
Borrowing costs currently total just under £32 million per year – up from £28 million three years ago.
The WAO has carried out similar financial assessments for other councils.
A Swansea Council spokesman said the authority had delivered more than £70 million savings over the past five years, but that this became more difficult every year.
He said: “We set challenging targets for directorates each year and while it is the case that not all originally planned savings are achieved, we hold directorates to account and look for them to make compensating savings in year to ensure that overall the council’s accounts are balanced.
“There have been occasional and targeted use of reserves for specific purposes, and these have been widely reported upon.
“It is equally the case that contributions have been made to other earmarked reserves to support future planned expenditure.”