Welsh Councils Facing Sustainability Crisis Amid Prolonged Under-Investment

Welsh local authorities are at a critical juncture, with a new report warning that years of chronic under-investment have left councils struggling to deliver essential services. The position paper, published by the Independent Working Group on Sustainable Local Government and launched at the Welsh Local Government Association (WLGA) annual conference in Llandudno, outlines a stark picture of mounting pressures and diminishing capacity across the sector.

Local government in Wales is built on the principle of democratic responsiveness being close to communities and tailoring services to local needs. However, the report warns that financial constraints are now severely limiting councils’ ability to meet local priorities, placing the sustainability of the entire system in question.

The most significant pressures stem from rising costs in social care, education, and housing, which have steadily consumed council budgets. Inflation and increased wage bills have compounded the issue, forcing many authorities to scale back services that play a crucial role in community wellbeing, such as early intervention programmes, cultural services, and leisure provision.

The report calls for urgent reform of social care funding and delivery, stressing that care should remain a local responsibility while being better integrated with the health sector. However, without a substantial increase in central government support, the group warns that any structural changes will have limited impact on outcomes for residents.

In addition, the paper advocates for a greater role for councils in shaping public health strategy, emphasising their unique position to lead preventative efforts. Nonetheless, it cautions that simply transferring responsibilities from health boards to local authorities without additional resources could overwhelm smaller councils.

While the report stops short of recommending a structural overhaul of local government, it highlights the need for modernised delivery models, including enhanced use of technology, regional collaboration, and shared services. The overarching message is clear: without targeted investment and strategic innovation, local government in Wales risks becoming unable to fulfil its core democratic and service delivery functions.