Watchdog raises concerns over how Welsh Government funds councils
The way the Welsh Government funds Wales’ 22 councils, including Flintshire, does not always help them make the best use of the money they receive, a new report has found.
The report, published by the Auditor General for Wales, examined how the Welsh Government shares out the annual funding settlement and grants that make up most of what councils spend.
In 2025-26, councils received £6.1 billion through this settlement, on top of £2.7 billion in additional grants the previous year.
The formula the Welsh Government uses to work out how much each council should get has not been independently reviewed in over 20 years, since before the 2001-02 settlement.
Some of the data used in that formula is decades old, including 1991 census data on how spread out communities are and 2001 census data on numbers of pensioners and children in single-parent households.
Together, this outdated data helps decide how more than £2 billion of funding is shared between councils each year.
The report also raises concerns about grants given to councils for specific purposes, which often come with conditions attached.
In 2024-25, the Welsh Government gave councils a fifth of that year’s total grant funding, £1.5 billion, in March, the final month of the financial year.
The report says this leaves councils little time to plan how to spend the money, increasing the risk of rushed decisions that do not represent good value for public money.
Flintshire received an average of 5% of the Welsh Government’s main council grant, the Revenue Support Grant, between 2011-12 and 2025-26, according to the report, falling to 4% for 2026-27.
The Auditor General for Wales, Adrian Crompton, said: “Many of the findings in this report reflect reoccurring themes I have seen throughout my time as Auditor General.”
“This report finds that the way the Welsh Government funds councils does not always help them to achieve value for money, particularly over the longer term.”
“Addressing these themes is essential if the Welsh Government and local authorities are to navigate today’s extreme financial and demand challenges and deliver sustainable public services to the people of Wales.”
The report makes five recommendations to the Welsh Government, including giving councils clearer information about future funding levels and improving how grants are designed and given out.
No Welsh council has ever issued what is known as a section 114 report, a formal warning used when a council cannot balance its budget, and the report says the Welsh Government has not set out what support would be available if one were issued.
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