Schools, libraries, roads and parks and other local authority assets often represent the most identifiable public face of local government in its communities. The relative state of repair of these assets is key to the service quality and accessibility and can influence citizens' experience and perceptions of their communities. Local authorities in Wales use capital expenditure to maintain these assets and to acquire and create new ones which enhance service delivery and the quality of the built environment.
Unlike other public sector bodies, local authorities have the power to borrow money to fund capital projects. Introduced in 2003 Prudential Borrowing was the first major change to local authority capital finance in over ten years. The legislation provides the broad framework for the 'prudential system' but the new system places the emphasis on local authorities planning their needs for capital expenditure in a sensible and long term way based upon sound management of assets and finances.
Welsh Councils have, in line with all sectors of the economy, been adversely affected by the current financial difficulties. In particular their ability to raise investment funds through the disposal of surplus assets has been affected. This has meant Councils having to make difficult decisions regarding the development of new buildings and the maintenance of existing ones. In recent years Councils have taken significant strides in improving their asset management arrangements and through this process have identified a substantive issue in terms of backlog maintenance. This will be a significant challenge in the medium term.
For more information contact: Will Mclean