Steve Freer, CEO of the Chartered Institute of Public Finance (CIPFA), responded today to the publication by the ONS of the Local Authority Revenue Expenditure and Financing Provisional Outturn for 2012-13.
Speaking about the increased level of reserves held by councils, Steve Freer said:
“Recent changes to local authority funding, including the localisation of business rates and council tax benefit, have created additional uncertainty for councils’ future budgets.
“When considered in the context of the Government’s on-going austerity programmes and ever tighter financial settlements, it is encouraging that the majority of councils are exercising prudence in their reserves management, providing crucial capacity to invest in service transformation and a hedge against future unexpected shortfalls.
“Authorities should be particularly careful about using one-off reserves to deal with shortfalls in recurring funding. That is a recipe for significant financial problems in the medium term. Reserves are not a long term solution to funding challenges and at best can only buy time to enable service changes to be planned and implemented in an orderly way.”
Contact: Matt Patterson
CIPFA Press Office
t 0207 543 5787
Notes to Editors:
1) The ONS’ Local Authority Revenue Expenditure and Financing: 2012-13 Provisional Outturn can be found here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/233176/RO_Provisional_Outturn_2012-13_Statistical_Release_-_FINAL.pdf
2) CIPFA set out its position on council reserves in December 2012: http://www.cipfa.org/about-cipfa/press-office/latest-press-releases/cipfa-sets-out-position-on-council-reserves
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. This includes the development of local professional qualifications in African countries like Lesotho and Nigeria and in Europe in post conflict states in the Balkans.