"A failure of collective responsibility." That was the verdict of Max Caller's report into failures at Northamptonshire County Council. Their historic issuing of two section 114 notices, in combination with more recent delays to audit reporting across the sector, have called the ability of some councils to effectively manage their finances into question.
Government has responded to this challenge with the Redmond Review into local audit. While CIPFA greatly anticipates Sir Tony's report in 2020, and will remain heavily involved in its progress, action is needed now. Thankfully, CIPFA has been working on this issue for some time!
At this time of substantial change and reduced trust in public services, it is vital that we do not forget the basic principles that must underpin change – namely good governance and robust financial management.
This is why we are introducing the CIPFA Financial Management Code – the first new Code the Institute has released in 15 years. This Code, which is based on a wider framework of standards, will support councils to provide greater assurance and transparency around financial decision making.
This Code has been a collaborative endeavour – not only to create a product that the sector can get behind, but to echo its ambition to embed good financial management as a collective, organisational responsibility. All leaders within local authorities, not just the Section 151, have a responsibility to ensure that finance is a core element of their policy decisions. It is vital that, as a sector, we break down historically siloed ways of working and move towards a sense of collective responsibility when it comes to finance.
While the political echo chambers resonating at home and abroad make transparent governance more, not less, difficult to achieve, it’s all the more important that local government is clear and focused on maintaining strong and resilient systems. The new CIPFA Code will allow us to get back to the basics of public service in the current climate, enhancing resilience and rebuilding trust in the public sector.
This article first appeared in The MJ.
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