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The Auditor General for Wales has today published his Annual Improvement Report on Caerphilly County Borough Council.

The Auditor General for Wales has today published his Annual Improvement Report on Caerphilly County Borough Council, and said: 'Whilst there are weaknesses in its self-evaluation arrangements, and the pace of improvement is slow in some key priority areas, the Council has made some service improvements. However, since I concluded, in September 2012, that the Council was likely to comply with the requirement to make arrangements to secure continuous improvement during 2012-13, providing it increased the pace of improvement, we have found significant failings in its governance arrangements, and I will therefore undertake a special corporate governance inspection of the Council later this year.

The Council's Appointed Auditor issued a Report in the Public Interest in March 2013 on failures in governance arrangements and inadequacies in the processes followed by the Council to set the pay of chief officers. The Appointed Auditor concluded that the Council 'acted unlawfully with regards to this pay-setting process', and made five recommendations. The Council is undertaking its own disciplinary investigation as a result of the report, but this is on hold pending an investigation by Avon and Somerset Police.

The Auditor General also concluded that, whilst the Council has discharged its improvement planning duties under the Local Government Measure in 2012-13 and acted in accordance with Welsh Government guidance, it has failed to discharge some of its improvement planning duties for 2013-14. The Council's progress against regulators' recommendations is mixed and often slow. Encouragingly it has accepted that accountability arrangements to manage and deliver the findings from audit and inspection work need to be strengthened, but these arrangements have not yet been put in place.

Although the Council has to date responded to the financial challenges it has faced and secured savings in advance of need, it does not have a rigorous approach to developing business cases or to setting, delivering, monitoring and evaluating savings in order to meet future demands and challenges.

The Council's performance in improving services in 2011-12 has been mixed and it has been slow to address some key priority areas. The Council with its partners has continued to make good progress in making Caerphilly county borough a safer place to live in. Education services for children and young people are adequate with adequate prospects for improvement, and a new Education Achievement Service for South East Wales has been created and is focussing on improving attainment within schools. Whilst the Council provides citizens with a range of channels to access its services, it has been slow to progress improvements to the way it engages citizens. The Council's efforts to regenerate and support the economy have had a mixed impact as has its performance in relation to health and social care. There are also key weaknesses in the way the Council manages its people, information and assets.

The Council has embedded performance management arrangements and has effective arrangements in place to collect, record and monitor performance information. However, it needs to address weaknesses in its approach to self evaluation and challenge, and report and account for its performance in a more balanced and transparent way.

As a result of his findings, the Auditor General makes four statutory recommendations to the Council to which it must respond within 30 days. These are:

1. Address the five recommendations made by the Appointed Auditor in his Report in the Public Interest dated March 2013.

2. Address the outstanding proposals for improvement identified in the Auditor General's work to date.

3. Address the three recommendations made in the Auditor General's report Evaluation of Social Services Contributions to the Medium Term Financial Plan, dated July 2013.

4. Put in place arrangements that enable the Council to formulate, scrutinise and approve its improvement objectives in a timely way to meet its statutory obligations under the Measure.

The Auditor General has also decided as a result of the findings of the Appointed Auditor, and the wider governance issues highlighted in his Annual Improvement Report, to undertake a special inspection of the Council. The inspection will focus on the Council's governance and decision-making arrangements, and will assess the progress it has made in addressing the recommendations made in his Appointed Auditor's Report in the Public Interest issued in March 2013.

Notes to Editors:

• The Auditor General's special inspection of Caerphilly County Borough Council later this year will be conducted under section 21 of the Local Government (Wales) Measure 2009 (the Measure). The Measure requires the Auditor General to mention any matter in respect of which he believes, because of the inspection, that the Council is failing to comply with the requirements of Part 1 of the Measure (local government improvement).
• Under the Local Government (Wales) Measure 2009, the Auditor General must report each year on how well Welsh councils, fire and rescue authorities, and national parks are planning for improvement and delivering their services in an Annual Improvement Report.
• The reports also set out the progress each authority has made since the Auditor General published his last Annual Improvement Report and draw on the Authority's own self-assessment.
• The Auditor General has also drawn on the work of other relevant Welsh inspectorates, Estyn, and the Care and Social Services Inspectorate for Wales, as well as work undertaken on behalf of the Wales Audit Office when preparing this report.
• The Appointed Auditor's Report in the Public Interest on Caerphilly County Borough Council published in March 2013 can be read here.
• The Wales Audit Office wants to find out whether this report provides the information the reader needs and if it is easy to understand. Please let us know your views by e-mailing us at info@wao.gov.uk or writing to us at 24 Cathedral Road, Cardiff, CF11 9LJ
• The Wales Audit Office's mission is to promote improvement, so that people in Wales benefit from accountable, well-managed public services that offer the best possible value for money. It is also committed to identifying and spreading good practice across the Welsh public sector.