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Capital spending by Welsh councils should factor in changes to WHQS, auditor general finds
Some Welsh councils are failing to factor the impact of national policy such as the Welsh Housing Quality Standard (WHQS) into their capital planning, a national audit has found.
Some Welsh councils are failing to factor the impact of national policy such as the Welsh Housing Quality Standard into their capital planning, a national audit has found #UKhousingA new report by Audit Wales identified that councils are not always clear on how capital plans help them to deliver local priorities, or how they will secure value for money.
It found that councils do not generally have a comprehensive understanding of the condition of all of their assets, which should influence capital plans by identifying which assets to “maintain, repair, replace and dispose of”.
Councils have not completed asset condition surveys of most of their assets, the report found. It said the “lack of comprehensive information on asset conditions means that capital plans are generally not well informed”.
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Another issue identified was that capital plans by Welsh councils “do not clearly set out the impacts of national policy and how this has shaped them”.
The report said council officers are aware of the influence national policy can have on capital plans, such as “changes to the Welsh Housing Quality Standard for councils that have council houses”. Other policies highlighted include the public sector net zero target by 2030.
Despite this awareness, the audit found that “few councils can show how they have considered [national policy] in their capital plans”.
“This means it is not clear how councils have factored these issues into planning nor any tensions there may be with local priorities,” the report added.
From April this year, an updated version of the WHQS will come into force, including a new requirement for social landlords to investigate serious hazards within 24 hours.
Alongside its report, Audit Wales published a checklist for councils to follow to improve their capital planning processes.
In 2023-24, total capital spending by Welsh councils was £1.92bn, of which around a quarter was on housing.
Audit Wales said that since 1997, housing and education have been the two largest areas for capital spending.
Adrian Crompton, auditor general for Wales, said: “Councils must balance spending on new assets to meet demand pressures, against the significant financial challenges they face.
“I recognise that this is an incredibly difficult balance to get right. It underlines, however, the importance of putting value for money at the centre of capital spending decisions.”
He said the report emphasises the need for councils to “improve their understanding of the condition of their current assets”.
“Without this understanding, there is a risk that councils do not understand how much they will need to invest in the future and identify the scale of funding gaps,” Mr Crompton added.
The Welsh Local Government Association has been contacted for a response.
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