CIPFA has today published the new Prudential Code for Capital Finance in Local Authorities (Prudential Code) and Treasury Management in the Public Services Code of Practice and Cross-Sectoral Guidance Notes (the Treasury Management Code) following a consultation period.
These two statutory and professional codes are important regulatory elements of the capital finance framework within which local authorities operate. Local authorities are required by regulation to 'have regard to' their provisions.
The consultations, which preceded publication, included relevant extracts for changes to the supporting guidance on each of the codes. Guidance notes will follow shortly in the new year.
Richard Lloyd-Bithell, Senior Policy and Technical Manager at CIPFA, said: "Both codes have been subject to a full and extensive consultation process and received significant response rates with more than 100 responses for each respective consultation.
"We welcome the thoughtful challenges and contributions of the sector and are pleased that the majority of respondents were supportive of the proposed changes, summarised below, with very few expressing direct opposition. CIPFA looks forward to publishing an analysis of the consultation questions this week."
The updated Prudential Code includes the following as the focus of the substantive changes:
The main changes to the updated Treasury Management Code and the accompanying guidance for local authorities are as follows:
Notes to Editor
The new codes will have a soft launch of its provisions for the 2022/23 financial year. Where possible, local authorities should make their best endeavours to adhere to their provisions and not undertake any new investments which would not be consistent with the changes. The codes will be fully implemented in the 2023/24 financial year. Authorities therefore do not have to amend or revise any treasury or capital strategies for 2022/23 to incorporate the additional disclosure requirements for investment categories and new indicators.
CIPFA undertook a principles-based consultation on the codes from February to April 2021, which was then followed by a second consultation on the detailed changes to the codes from September to November 2021.
CIPFA, the Chartered Institute of Public Finance and Accountancy, is the professional body for people in public finance. CIPFA shows the way in public finance globally, standing up for sound public financial management and good governance around the world as the leading commentator on managing and accounting for public money.
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