Government funding for North Wales Police has dropped in recent years, as a major report casts doubt on the state of the country's policing.

The National Audit Office report says that the Home Office is unsure whether the police system in England and Wales is "financially sustainable", while officer numbers and arrest rates have fallen.

Home Office figures show that government funding for North Wales Police was cut by 2% between their 2015-16 and 2018-19 budgets – but in real terms, when inflation is taken into account, the fall is greater.

Across England and Wales, overall funding to forces, made up of central government grants and council tax, has fallen by 19% in real terms since 2010-11, according to the NAO.

Sir Amyas Morse, head of the NAO, said: "There are signs that forces are already experiencing financial strain and struggling to deliver effective services to the public.

"If the Home Office does not understand what is going on it will not be able to direct resources to where they are needed, with the risk that the situation could get worse."

In North Wales, local council tax payers have picked up the bill for policing, with the contribution from council tax increasing by 12% to £75 million between 2015-16 and 2018-19.

North Wales Police employed 1,490 officers in March this year, three more than three years previously.

But longer term, across England and Wales, forces have managed financial pressure by reducing the size of their workforces, the report said. It cited figures showing falls of 40% in the numbers of police community support officers, 15% of officers and 21% of other police staff between 2010 and 2018.

The arrest rate fell to 14 per 1,000 population in 2016-17, down from 17 per 1,000 population in 2014-15. The time it took to charge for an offence increased from 14 days for the year ending March 2016 to 18 days for the year ending March 2018.

Police are carrying out less "proactive" work, with fewer breathalyser tests, motoring fixed penalty notices and convictions for drugs trafficking and possession since 2010, the report said.

A Home Office spokesman denied the report’s suggestion that ministers do not understand the effects of police cuts.

He said: "Our decision to empower locally-accountable Police and Crime Commissioners to make decisions using their local expertise does not mean that we do not understand the demands on police forces.

"In addition, the report does not recognise the strengths of PCCs and Chief Constables leading on day-to-day policing matters, including on financial sustainability.

"We remain committed to working closely with police and delivered a £460 million increase in overall police funding in 2018/19, including increased funding for local policing through Council Tax."

Chief Constable Dave Thompson, the National Police Chiefs' Council lead for finance, said: "While policing continues to provide a good service, today's National Audit Office report recognises that forces are under increasing strain as they deal with rising crime, demand that is more complex and an unprecedented terror threat with fewer officers."