In a report out today, the Accounts Commission said the council has made good progress since a previous audit in 2009.

The report makes clear that overall the council continues to improve, with a strong commitment from councillors and staff to realise the change and improvements needed to meet future challenges. This includes tackling the council’s significant budget gap of £43 million over the next three years.

Some major changes to the way services are provided have already been made, bringing about improvements to services and also saving money, the watchdog added. In particular, the council delivered on its commitment to building 2700 affordable homes between 2012 and 2017, in partnership with Fife Housing Alliance. Other changes included rationalising the number of council offices and introducing a new Care at Home digital scheduling system.

The report says that one of the most significant challenges facing Fife Council is the varied level of inequality across the area. In some aspects of education, for example, there have been improved outcomes for pupils from the most deprived areas. And the council’s investment in its new social work strategy for children and families is already having a clear impact.

The Accounts Commission recommends that the council, together with its partner organisations, should now tackle the gap in life expectancy between the most and least wealthy, and alleviating pockets of deprivation in some communities.

The Fife Health and Social Care Partnership faces substantial financial challenges in the next few years, with changes to service provision required urgently. Fife Council must work with relevant partners to help bring about the changes needed, the watchdog added.

Graham Sharp, chair of the Accounts Commission, said: “I am reassured by the improvements that Fife Council has continued to make and by the meaningful ways in which the council engages with local communities to achieve change. We shouldn’t lose sight of the serious challenges facing it, particularly in terms of its forecast budget gap, the impacts of inequality, and the significant commitments of Fife’s Health and Social Care Partnership.”

Welcoming the report, Fife Council chief executive, Steve Grimmond, said: “This is a strong, independent endorsement of what we’re doing in Fife - and it’s a testament to the hard work and commitment of our employees.

“Like all councils, we have a duty to secure continuous improvement in performance, while maintaining an appropriate balance between quality and cost. I’m very pleased that this report highlights how far we’ve come since our last Best Value audit in 2009, and confirms we have a solid basis for the ongoing improvement and change needed to deliver a stronger, fairer Fife and our council of the future.”