COVID-19 probably arrived at the worst time for many councils. Even before the arrival of coronavirus, many local authorities were at significant financial risk after 10 years of austerity - during which time spending on local services fell by 21% in real terms.
But Coronavirus has shone a spotlight on local government finances like never before. It has also increased the complexity of the issues council leaders now face, including even greater demand on social services, falling commercial revenues and the non-delivery of savings plans. Layer on this the potential negative impact of Brexit, the need to develop local policies to achieve the UN’s 2030 sustainability goals and the UK government’s own ambitions regarding the levelling-up agenda and climate change, and the challenges that need to be overcome can seem insurmountable.
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The Financial Foresight Approach
Developed with Grant Thornton, Financial Foresight is a modelling tool which projects costs and income forward to provide a baseline financial forecast for every council in England.
In addition to income and costs projections, Financial Foresight benchmarks spend between authorities, and applies socio-economic and service outcomes in order to understand the nature and effectiveness of spend. This analytical framework enables us to engage with authorities at both a sector and individual council level, providing relevant and critical forecasting data direct to your team that would otherwise take months to assemble and clean. From this baseline we apply the testing and sensitivity functions of the platform to appraise the validity of different financial strategies, by benchmarking savings aspirations against peers, and measuring the impact on net spend and reserves of proposed interventions.
How local authorities can prepare for coming challenges
For advice and support, please contact:
Nina Johansson, Senior Business Development Manager, CIPFA
T: 020 7 543 5600