Councils in Wales are not making the best use of the voluntary sector to deliver public services, nor doing enough to ensure they are securing value for money, the Auditor General for Wales has concluded.
In a report published yesterday, Huw Vaughan Thomas says partnership activity between councils and third sector organisations is neither sufficiently consistent nor effective in delivering better outcomes for the public.
It says council funding for third sector services has weaknesses, including inconsistent performance-monitoring systems and uncertainty among councils over which procurement processes to use.
The report says the amount awarded by local authorities to third sector organisations in Wales rose from £68.2m in 2001/02 to £248.8m in 2013/14.
But it says the quality and accessibility of information from local authorities on the processes for applying for contracts and the criteria used to award contracts is "of a variable quality and not always streamlined to support full engagement from third sector organisations". Weaknesses including uncertainty from councils over whether to use open or closed procurement processes, a decline in grant support and a reduction in those operating a full cost recovery model for third sector projects "present significant challenges for many third sector bodies", it says.
"Overall, because of these weaknesses it is unclear if local authorities are consistently securing value for money from their third sector investment."
Few councils have comprehensive corporate-wide strategies or frameworks based on good quality data to inform decisions, the report says.
"We found that performance-management arrangements are too inconsistent to provide an adequate level of assurance that services are working well and resources are being used effectively," it says.
"Many third sector organisations are not clear about what is required from them and require better support from local authorities. Poor performance-management arrangements are also weakening accountability and limit effective scrutiny of activity and performance by elected members.
"Most local authorities have not set measures to be able to consistently judge the impact of their work with the third sector, and inconsistencies in risk management arrangements make it difficult for local authorities to evidence how well they are working with the third sector."
The report says that research by the Welsh government and the Wales Council for Voluntary Action concluded that the voluntary sector in Wales consisted of more than 32,500 organisations employing 51,000 people.