NEWPORT council was praised by the Wales Audit Office (WAO) for delivering a balanced budget for the first time, despite undergoing a significant change in leadership.

A report following a corporate and performance assessment of the city council carried out by the WAO found its Conservative Liberal Democrat coalition, formed in 2008, showed signs of strength, was establishing foundations for change and was addressing long-standing financial management issues.

But it also said the council needed to develop medium-term financial plans, further develop IT services to ensure they are delivered in the most cost effective way and look at how it manages its assets if it is to keep on improving.

The report discussed at Monday's cabinet meeting commended the council on delivering a balanced budget for the first time and said the authority had recognised that it could not continue to rely on council balances.

It said the council was continuing to look at ways to save money and had already achieved savings of £800,000 a year by changing its school catering services.

The report continued that the authority was working to develop ideas for transforming the way its services were delivered in a bid to provide better value for money and said it had achieved this by changing the way it delivered its meals on wheels service and day services for vulnerable people.

The authority also proved it was working well with other councils in Gwent to deliver the Gwent Frailty Scheme - a scheme aimed at keeping people out of hospital and residential homes through care give at home, the report said.

The findings were welcomed by members at Monday's meeting.

Council leader Matthew Evans said the authority had made significant progress but now was not the time to be complacent.

He said there were tough times ahead but said the council was moving in the right direction.