Enthusiasm for Wales' local health groups could wane unless they are given more powers and a clear sense of direction, the Audit Commission has warned.

In a report on the 22 LHGs set up on 1 April last year, the commission says they 'can claim considerable achievement', especially in forging partnerships and alliances.

But it raises concerns about their accountability, funding, information support and long term goals and says these will need to be addressed before they face 'the most difficult issues'.

Although the report finds 'no great enthusiasm' for primary care trust status - which has been ruled out in Wales - it says LHGs want to know what the ir 'endpoint' is meant to be .

'It was suggested that current patterns of devolution (of responsibility to LHGs) often reflect health authority management cost and financial problems more than LHG capabilities and local needs, ' it concludes.

'LHGs need more sense of direction if momentum is to be maintained.'

This conclusion was backed by the British Medical Association in Wales.

A spokesperson said it wanted to know 'where LHGs are going. At the moment, they are all at different stages because some HAs are not letting go.'

But the report says only a third of LHG boards met in public at least once a month, compared to 82 per cent of primary care group boards.

Although they are supposed to work within a performance or accountability agreement with HAs, LHGs in three out of Wales' five HA areas had signed no such agreement, and only one in two LHGs had agreed a draft.

The report says 'local agreements for LHG accountability will need to be clarified as early as possible in 200001'.

It calculates that the average per capita cost for managing LHGs last year was£2.98.Average staffing levels were 7.5, compared to 4.5 in PCGs, but general managers complained 'perhaps inevitably' about staff constraints.

Management costs have to be found from fundholder and HA savings, and the report says NHS Wales' well known financial problems have 'left little scope for funding new developments in commissioned services'.

HAs provide funds for specific delegated responsibilities and the report says it is 'not realistic' to expect LHGs to prove they can manage budgets that 'include the most volatile costs but exclude most areas of major expenditure'.