survey shows growing fears of council finance chiefs over budgets


Local Authority Chief Finance Officers (CFOs) are beginning to express fears about the level of risk associated with 2011/12 budgets, according to the latest survey from the Chartered Institute of Public Finance and Accountancy (CIPFA).

Councils are currently finalising their budgets for the new financial year commencing on 1 April 2011. However, because of reduced funding from Government their plans incorporate much higher levels of change than would normally be the case. CFOs are worried about whether all of the planned change measures can be delivered successfully on time. Failure to do so is likely to result in budgets being overspent, creating further financial problems for authorities in the medium term.

Changes which are helping councils to balance budgets include new efficiency projects, initiatives to share services with other public bodies, increasing/introducing new fees and charges for services, and reducing or withdrawing front-line services.

70% of CFOs are concerned that a proportion of these changes will take longer than planned to implement as councils grapple with reduced staffing numbers and face public opposition to cuts in some services. More than 50% are fearful that some initiatives will cost more to implement and save less than currently planned.

CIPFA Chief Executive, Steve Freer, said, “Many councils are planning major organisational, systems and service changes in every department. Chief Finance Officers are committed to help implement these initiatives but they are also drawing attention to the very real risks which must be managed along the way.”

“Balancing tight budgets is a tough, stressful activity. CFOs are reminding councils that the business of delivering budgets is likely to be even more challenging.”

Draft council budgets continue to show a significant proportion of budget reductions being directed towards back-office activities. For example, two thirds of councils are planning cuts of between 5% and 20% to Finance, Human Resources and Information Technology Departments’ budgets. Front-line services also face significant reductions, however. For example, cuts of more than 10% are reported for the following services:

    Public libraries, archives, arts, museums and heritage     45% of authorities 
    Leisure, parks, open spaces, Sports and recreation         28% of authorities 
    Economic development, regeneration                            42% of authorities

On a more positive note nearly 60% of CFOs report that their plans for the financial year commencing on 1 April 2012 are fully or largely developed. Despite considerable short term dilemmas, it is clear that councils are also working hard to lay plans for the medium term.


Contact: Guy Roberts/ Lindsay Machin / Chloe Forbes
CIPFA Press Office
t 020 7543 5712/5645/5787

Notes to Editors

More information about the survey is available here


CIPFA, the Chartered Institute of Public Finance and Accountancy, is the professional body for people in public finance. Our 14,000 members work throughout the public services, in national audit agencies, in major accountancy firms, and in other bodies where public money needs to be effectively and efficiently managed. As the world’s only professional accountancy body to specialise in public services, CIPFA’s portfolio of qualifications are the foundation for a career in public finance. They include the benchmark professional qualification for public sector accountants as well as a postgraduate diploma for people already working in leadership positions. They are taught by our in-house CIPFA Education and Training Centre as well as other places of learning around the world. We also champion high performance in public services, translating our experience and insight into clear advice and practical services. They include information and guidance, courses and conferences, property and asset management solutions, consultancy and interim people for a range of public sector clients. Globally, CIPFA shows the way in public finance by standing up for sound public financial management and good governance. We work with donors, partner governments, accountancy bodies and the public sector around the world to advance public finance and support better public services.