The following is a transcript of the speech given by Adrian Crompton, Auditor General for Wales, at the ICAEW Public Sector Conference on 5 December 2025. 

Introduction

"It’s a real privilege to be speaking at this year’s Conference. I had the honour of addressing the inaugural event in 2021 and Audit Wales enjoys a very strong relationship with ICAEW, so I’m delighted to support this event today.

I’ve been Auditor General for Wales since 2018 – it’s an amazing role, the external auditor for the entire devolved Welsh public sector: from the Welsh Government itself to every part of the NHS, local authorities, sponsored bodies, police and fire services, and more than 700 town and community councils.

But all good things come to an end and by law, my term must end in July next year. So, as my time in office draws to a close, this feels like an opportune moment to share reflections from over seven years in the role: on the strengths of our public sector, the challenges it faces, and – most importantly – the path that lies ahead.

And that’s what I’d like to do today."

My starting point is to recognize the strength and capability of our public service in Wales

We see their impact and delivery all around us every day in our schools, our hospitals, our homes, our environment, our communities.

Those services in turn rely on the skill, hard work and dedication of hundreds of thousands of public servants.

The public sector has been tested by two decades of financial pressure, demographic and social change, ever increasing demand, and wider challenges from climate change, Brexit and global events that have very real local consequence.

Perhaps the greatest of those challenges was the Covid-19 pandemic, the residual effects of which are still with us today.
During that time, I saw the very best of the public service in Wales. Frontline workers continued their work under immense pressure; all parts of the system collaborating to deliver genuinely life-saving initiatives such as mass vaccination.

So, a dreadful time for so many, which also showed some of the very best features of the public service in Wales and what can be achieved when it is united around a clear, common objective and pulling in the same direction. 

But excellent service delivery is not just about responding to emergencies. The public have a right to expect it at all times.
Of course, that is not straightforward to do because the challenges facing the public sector are considerable."

Financial Challenges

"Let's begin with the financial landscape.

In local government, budgets have been squeezed year on year. Fast rising costs in areas like children’s services or temporary housing are bringing some councils to the very edge of financial sustainability.

Many are relying on reserves to balance budgets.
This approach is unsustainable. 

In the NHS, the Welsh Parliament – the Senedd - passed legislation in 2014 requiring individual health bodies to break even over a 3-year period. Yet most health boards have been unable to meet that break-even duty for a number of years. 

So despite record levels of investment and ever-increasing levels of savings, health boards are unable to keep up with rising demand and inflationary pressures."

Demand and performance

"Demographic and societal change, and the lingering impact of the pandemic are driving ever-increasing demand.

As a result, simply allocating more funds does not guarantee a solution.

At the start of devolution over 25 years ago, the NHS consumed around a third of all devolved funding in Wales. Today, it is more that 50%, yet still we see many areas of poor performance.
And that ever-growing share of the pie being taken by the NHS squeezes the resource available for other areas. 

In my view that changing pattern of funding between sectors needs to be rebalanced if important services are to be sustainable."

Complexity and Fragmentation

The public service delivery landscape in Wales is crowded. By way of illustration, my office audits the accounts of close to 100 important public bodies and structures. 

In addition, various partnership arrangements layered on top to drive more collaborative activity. 

While every one of our public bodies and partnership structures is no doubt rooted in well-intentioned rationale, the combined effect is overly complex.

That complexity leads to a system that can be slow-moving, with overlapping responsibilities and unclear lines of accountability. It can also make it difficult for citizens to navigate services or understand who is responsible for what.
 

Trust and Confidence

"I have growing concerns about declining trust and confidence in public services and governance structures across Wales.

That is not unique to Wales and is fed in part by factors beyond our control - broader geopolitical and domestic political issues, societal changes, change in the way people access media, the public’s view of politics nationally and internationally. 

Some factors, though, are much more within our gift.

First and foremost, to win and maintain public trust and confidence, we must consistently demonstrate the pace and effectiveness in public service delivery that we’ve shown we can achieve in emergency times. 

A further factor, on which I have a direct line of sight, is governance. 

The overwhelming majority of public sector organisations are well governed most of the time. 

Regrettably, though, I have reported on too many examples of poor organisational governance.

These failures invariably feature some weaknesses in process such as poor record-keeping, application of policy, or a lack of transparency. 

But more significantly, in my view, many governance failures in public organisations are rooted not in process but in human behaviour. 

They manifest in the form of poor decision making, relationship breakdown, wasted public money – on settlement payments, legal or consultancy fees. 

And every time the public sees such examples, it further undermines their confidence and trust: we are all tarred with the same brush. And that trust is essential if the public is to support the kind of transformation required to make our public services sustainable for the long term.

So, what can be done?

"Simply put, I believe the public sector needs to increase productivity and deliver better value for money if we are to square the circle of ever rising demand, expectation and cost, with funding that cannot keep pace.

In the next part of my address, I would like to explore five opportunities that I believe are we need to exploit if we are to square that circle. 

Getting the Basics Right

Years of financial squeeze have left some essential areas under-invested. We must address these if we are to improve increase productivity. I’d point to 3 examples:

Digital: We know the technology exists to transform service delivery and reduce costs. But many bodies still rely on ageing, unreliable platforms that limit their ability to exploit the benefits of technology. The public sector also has a mixed record in its delivery of technological change programmes. 

Workforce: I’ve lost count of the number of times I’ve highlighted recruitment and retention issues as a constraint on the public sector’s ability to deliver. It’s seen in all sectors – central civil service, the NHS, teaching, many small but important specialisms including the finance profession. 

Assets and Infrastructure: We need significant capital investment in many areas if we are to increase public sector productivity. And we also need to address the long term neglect of routine maintenance manifesting in operational inefficiency – classrooms or hospital theatres unavailable and so directly damaging the volume and quality of service provision. 

So significant and sustained investment in the basic building blocks of our public service is essential in tackling our productivity challenge. It’s relevant too to my second theme, namely secreting value for money. 

Value for Money and Productivity

The work of my office consistently highlights examples where we could make the money we do have work better. 

A good example can be seen from the number of people who are currently in hospital awaiting discharge. Last year Welsh hospitals housed 17,451 patients who were medically fit for discharge. These delayed discharges absorbed bed days which cost the NHS a staggering £185 million.

Better funding to increase social and community care capacity would therefore free up significant NHS resource and represent a cost-effective way of improving patient experience and outcomes. 

Too often, however, public bodies lack reliable data to assess value for money and are unclear about the outcomes they are hoping to achieve. That’s frustrating for me as Auditor General but, more importantly, if auditors are unable to assess whether a particular project or expenditure is delivering value for money, how on earth can the organisations spending that money know if it is the best use of their scarce resources.  

In Wales we have a unique piece of legislation called the Well-being of Future Generations Act. This is a piece of legislation which requires public bodies to put sustainable development at the heart of their operation. It requires them to consider long-term impacts, prevention, integration, collaboration, and involvement. 

I consistently call for the public sector to view Value for Money through the lens of that Act and those five ways of working.

So how can we be confident we are delivering Value for Money if we are not collaborating effectively with partners, if we’re not joining the dots between different areas of work, if we’re not designing solutions that meet people’s needs, if we’re burdening future generations with avoidable higher costs, if we’re missing opportunities to deliver more with less, and if we’re only  addressing the symptoms of the issues we face but not the root causes.

That much sharper and relentless focus on delivery of Value for Money, through that lens, takes me to the next opportunity for improvement, which requires a mindset shift to one focused on prevention and the longer term.

Shifting to a Long-Term, Preventative Mindset

"The evidence of the good sense of a preventative approach is clear.

Public Health Wales has estimated that for every £1 invested in public health interventions, there is a return of £14 in the shape of reduced demand on hospitals, social care, housing, and emergency services. 

My office looked at the cost of incidents arising from rough sleeping – estimated the total public sector cost of reacting to, not preventing, rough sleeping, could be as high as £200 million a year.

But too often, public services operate in crisis mode, responding to immediate pressures rather than planning for the future. This short-termism is reinforced by conflicting signals coming from central government - annual budget cycles, reactive funding decisions, and political incentives that prioritise quick wins over sustainable outcomes. 

That Well-being of Future Generations Act I’ve mentioned provides a framework to do something different in Wales – to act for the long-term and to act preventatively. 

However, my work shows that public bodies are struggling to make a meaningful shift towards prevention. 

One of the challenges is definition – exactly what do we mean by prevention and how much are we spending. So I am very pleased to see the work delivered by colleagues in CIPFA recently, which gives us real hope of developing an approach to classifying and identifying preventative spend. From there, we can do more to protect and incentivize it, and to identify its outcomes."

Reducing Complexity – Systems, Structures, Citizen-Centred Services

"Earlier, I touched on the complex nature of the landscape of Welsh public services. 

While it is not for me to blueprint the alternative, I am clear on the need to simplify and avoid further complexity.  If starting from a blank sheet of paper for a small nation like ours, we would surely not design the arrangements we currently have in place.

Reducing complexity is not about dismantling collaboration but about streamlining it. We need fewer, clearer structures with well-defined and sharper lines of accountability.

Again, these are expectations set by the Wellbeing of Future Generations Act where our work demonstrates much more needs to be done.

Leadership – Courage, Clarity, Coherence, Behaviours

And finally, addressing all of the areas I have mentioned will require political and executive leadership.

That means being honest about the scale of change required, making difficult decisions, and communicating clearly the necessary trade-offs. It also means modelling the behaviours we want to see: integrity, collaboration, and a relentless focus on outcomes.

The Welsh Government has a pivotal role to play as our system leader.

While it does much that is good, too often I find myself reporting that it needs to be clearer and firmer in its system leadership. 

This has been my central message in much of the work we have done around the Future Generations Act. So that, for example, the expectation on organisations to plan and act for the long term and with prevention in mind, is not undermined by conflicting signals from government on funding decisions, target setting, and accountability frameworks that incentivise the opposite.

Our leadership behaviours too must be based on integrity, fairness, and accountability.

I recognise the intense pressures faced by public sector leaders. These are difficult jobs. But as noted already, where leadership fails to uphold the desired values, the result can be costly and public confidence erodes.

Facing the future

"Despite the very significant challenges I’ve described I remain an optimist, especially if the themes I have described are sincerely addressed.

Wales is a small, tightly networked country. a population of 3 million people; a legislative parliament (much expanded from next year) and a government with significant autonomy; its public spending budget of nearly £30 billion represents almost third of Welsh GDP; and despite having many challenges its public sector is highly capable and well-resourced compared to many countries.

That is a great base to work from.

There will be elections to our Senedd next year – using a new proportional representation system to elect 96 members rather than the current 60. 

As Auditor General, I very much hope that larger legislature uses the additional capacity to improve scrutiny and accountability, and strengthen evidence-led policymaking.

The work of Audit Wales is a treasure trove of information to support that increased capacity and I very much hope the next Senedd will draw on it even more.

As it does so, the message I would leave after nearly 8 years in the role of Auditor General for Wales is that radical transformation is needed. 

It’s possible, but difficult and will require a clarity of purpose on the scale of that seen during the Covid years. 

I think public service leaders across Wales recognise the scale of the challenge and many are already navigating complex environments with limited resources. But the pace and progress needs to be increased. 

If not, our current model of public service delivery is not sustainable. Money will become even more thinly spread, services will continue to deteriorate, and outcomes will worsen. There must be a shift from short-term firefighting to long-term futureproofing.
And even then, success will hinge on individuals making the right choices.

Perhaps the most important insight I can offer from my time in the role of Auditor General is that good public services depend on people doing the right things.

Of course funding, process, frameworks and policies are important, and of course the work of auditors, regulators, politicians and the media are essential in holding public organisations accountable.

But ultimately, our public services rely on thousands of people making the right choices, taking the right decisions, and acting in the right way.

The challenge for government and organisational leaders throughout the public sector is to make that easy - to lead by example, to role model those behaviours, to give clarity about the scale of challenge, permission to make the change required, and to create the environment to enable all those in public service to play their part."
 

To close

"As my term as Auditor General for Wales draws to an end, I’d like to say a word of thanks to both the ICAEW and CIPFA. Both have been marvellously supportive partners to me and Audit Wales throughout my time in this role. 

As I’ve just said, Wales is small, and that is one of our strengths. We can convene quickly, share ideas openly and we can innovate. ICAEW and CIPFA have been vital partners in that through thought leadership and the ability to connect people across the profession. 

One of our weaknesses is that we tend to hide our light under a bushel, and so I’ve also greatly valued the platform and amplification that the institutes have given to our work in Wales. 

As I hand over the baton to my successor next year, my hope is that that partnership and mutual support continues. It has been a privilege to serve as Auditor General for Wales and to work alongside so many talented and committed people – both in Audit Wales and in the professional bodies. 

Thank you for your support. And to ICAEW and CIPFA, good luck with the proposed merger – I wish you every success for the future. Thank you. Diolch yn fawr."