CIPFA, the Chartered Institute of Public Finance and Accountancy, has announced a number of changes to its proposed Financial Resilience Index.
The modifications have been made after CIPFA received an unprecedented number of responses to the consultation on its Index from local authorities, representative groups, statutory bodies and auditors.
CIPFA’s key changes include:
More information on how CIPFA has responded to the consultation submissions it received and on its revised proposal are available on the Institute’s website.
Rob Whiteman, Chief Executive of CIPFA, commented:
“Local government has faced unprecedented financial challenges in recent years that are likely to persist well into the next decade. Because of these challenges, we are now approaching the point where a number of well-run councils will only be able to deliver core statutory provisions in order to balance the books. We are also seeing a significant number of authorities draw down upon their reserves in an unsustainable manner.
“The difficult financial situation that many authorities find themselves in is not helped by the weakness of public audit systems in place. Without suitable audit processes, often those at the helm of local authorities are able to listen only to the advice they like. Indeed, the Section 141 notices of this year are an example of the failure of the current public audit processes to identify risk.
“It is against this background that CIPFA has taken a leadership role in the public interest and devoted resources to the development of the Index. And now, following the feedback we have received, we have modified and strengthened the tool so it will be even more helpful for local authorities with deteriorating financial positions. The tool will sit alongside CIPFA’s planned Financial Management Code, which aims to support good practice in the planning and execution of sustainable finances.”
CIPFA will shortly publish national aggregate statistics from its Index – which will highlight the percentage of local authorities facing significant financial risk.
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CIPFA is the professional body for people in public finance. It represents approximately 14,000 members who are public finance leaders and officials in the United Kingdom and overseas, specialising in high quality public financial management and governance for organisations in, and providing support to, government and public services. Its members work throughout the public sector, in national audit agencies, in major accountancy firms, and in other public and private sector 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 is the foundation for a career in public finance. It also champions high performance in public services, translating its experience and insight into clear advice and practical services. Globally, CIPFA shows the way in public finance by standing up for sound public financial management and good governance.