Through research gathered recently on local authorities’ annual governance statements (AGS), CIPFA found that many authorities had made significant steps in improving their AGSs and were providing better accountability, but more work needs to be done to ensure others fully adopt the current standards.
In 2016, CIPFA and Solace published a new edition of Delivering Good Governance in Local Government: Framework. Each year local government bodies must publish an AGS to report on the effectiveness of their governance and internal control arrangements, with the first statements reflecting the updated framework published in July to September 2017 for the financial year 2016/17. Each statement should reflect the particular features and challenges of the authority so they should be very different.
CIPFA has reviewed a selection of AGSs for 2016/17 in order to advise local government on good practice and to identify any weak areas to improve in readiness for the 2017/18 statements. The results show some good examples to account for and explain governance issues in an engaging way. Two notable examples of improved presentation were Lincolnshire County Council and Brighton City Council. Other councils also made good attempts to assess and account for their governance over the course of the year, demonstrating transparency in their areas for improvement and a commitment to make changes.
However, there were also some significant weaknesses identified. Some councils did not use the 2016 Framework as the basis for their assessment. While some acknowledged that their adoption of the Framework was still work in progress, others continued to reference the obsolete principles and guidance.
This indicates that some authorities have not kept up to date with governance requirements and are failing to challenge the adequacy of their arrangements. One of the new requirements of the 2016 Framework was to improve accountability to the public and stakeholders by explaining how the authority has resolved any governance issues raised in the previous year’s statement. A number of authorities failed to include this element in their statements.
CIPFA would therefore like to take this opportunity to remind all local government bodies of the 2016 Framework and to ensure that their 2017/18 AGSs conform.
The Institute has produced a briefing that highlights areas of good practice for AGSs (see link below). And if you have any queries, CIPFA’s experts are happy to answer your questions.
Delivering Good Governance in Local Government: Framework (2016 Edition)
This requirement is set out in regulations issued by each regional government as follows:
Regulation 6(1)(a) of the Accounts and Audit Regulations 2015, Regulation 4(2) of the Local Government (Accounts and Audit) Regulations (Northern Ireland) 2015, Regulation 5(2) of the Local Authority Accounts (Scotland) Regulations 2014 and Regulation 5(2) of the Accounts and Audit (Wales) Regulations 2014 require an authority to conduct a review at least once in a year of the effectiveness of its system of internal control and include a statement reporting on the review with any published Statement of Accounts (England) (as a part of the Annual Accounts (Scotland)). Regulation 6(1)(b) of the Accounts and Audit Regulations 2015, Regulation 4(4) of the Local Government (Accounts and Audit) Regulations (Northern Ireland) 2015 and Regulation 5(4) of the Local Authority Accounts (Scotland) Regulations 2014 require that for a local authority in England, Northern Ireland and Scotland the statement is an Annual Governance Statement. It is also included within the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2016/17.
Delivering Good Governance In Local Government: Framework (CIPFA/SOLACE) Review of Annual Governance Statements 2016/17