Town and community councils insist they are following good practice following auditors’ claims that many are sitting on growing financial reserves.

The Wales Audit Office say numerous town and community councils raise more money than they spend and called on them to “get a grip” on financial management.

Last year, 197 councils increased or maintained their part of council tax, even though they had money left over from the previous year.

Aberaeron Town Council clerk Denfer Morgan said they had increasingly been forced to find ways to fund additional services and amenities following Ceredigion County Council cutbacks.

“These services include the stewardship of the playing field and playgrounds at Parc y Fro and Square Field; the provision of flowers during the summer season; and assistance with the cost of providing public conveniences and the tourist information centre,” he said.

“This increase in expenditure has entailed an increased use of reserves to bolster the money raised by way of the annual precept, which in turn is raised by way of council tax paid by all households in the town.

“The amount of reserves in 2016/17 stood at £56,096. In 2017/18, in order to meet expenditure of £47,496, the council had to utilise £2,429 of its reserves to top up the annual precept of £38,010 and other miscellaneous receipts. There was therefore a reduction in the reserves to £53,667.

“For this current financial year, 2018/19, the council budgeted to spend £53,367, made up of an increase in the annual precept to £38,386 and, after taking into account miscellaneous expenditure, the use of £10,541 of reserves. This will reduce the level of reserves to £43,125.

“The WAO recommendation is that the level of reserves should be in the region of the annual precept.

“For this financial year therefore, the level of reserves – £43,125 – is in the region of the annual precept raised, which is £38,386.”

For the full story, including comments from Cardigan and Lampeter councils, see this week’s south papers, on sale now