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Local services make a huge difference to people's health, wellbeing and quality of life. Yet there are indications that local services are not sustainable – economically, socially or environmentally.

In the NHS, organisations are allowed to spend more, or less, than the money they have been given if needed to ensure patient care. As a result, an increasing proportion of Trusts are rated at "high risk of financial failure". Local councils, by contrast, are legally required to both keep within budget and deliver certain services. With a 37% cut in central funding over the five years since 2010, councils have had to cut back other services, and longer-term investment and innovation.

Whether budget cuts put pressure on services or on finances, radical change in the way services are delivered is needed to make them more effective and cheaper. Some solutions being tried include joining up the delivery of different services, delivering services across bigger regions, and delivering services digitally.

Key NAO publications: Financial sustainability of local authorities 2014 (Nov 2014); The Impact of Funding Reductions on Local Authorities (Nov 2014); and Council Tax Support (Dec 2013)