Together, CIPFA and Grant Thornton have released 'Financial Foresight', which is a new model created to align with CIPFA's Financial Resilience Index and Future Resources Model. Powered by local authority financial data from 2009–2010 to 2017–2018, it provides current insights and a dynamic projection of every English council's financial trajectory over a 20-year horizon, focusing on the long-term sustainability of councils' finances.
A decade of financial pressures and a lack of certainty beyond the current financial year makes it hard for councils to manage their medium to long-term financial sustainability. The document here provides and overview of the Financial Foresight platform, which includes details of the Financial Strategy Accelerator workshop. This report below provides a detailed account of the road that local authorities have travelled since 2010, where they are now and looks at the escalating costs of demand led services and options for the future.
Our Financial Foresight model is designed to empower councils to prepare effectively for the future.
Watch the video of Rob Whiteman, Chief Executive, CIPFA and Paul Dossett, Head of Local Government, Grant Thornton UK, discussing financial management in local government.
Click the report above to read about the authority types at risk and access many interesting outputs from the latest modelling, such as:
- one in three (36%) councils in England are at risk of financial failure in the next ten years
- one in five (17%) at risk of financial failure by 2021
- in 66% of local authorities, spending on services is outstripping income.
A vision for the future
In addition to demand, income, expenditure, reserve and borrowing level projections, Financial Foresight can benchmark spend between authorities, and apply socio-economic and service outcomes to understand the nature and effectiveness of spend.
The solution comprises a future-look analytics platform that projects cost and income forward to provide a baseline financial forecast, with relevant comparative benchmarks for every council in England. It will benefit our customers by helping them understand the wider performance and socioeconomic context for financial decision making, as well as prescribing remedies for intervention through testing and evaluating a range of financial strategies and scenarios.
How Financial Foresight could help you
CIPFA and Grant Thornton have developed a technique for projecting local authority finance data historic trends forward, using a combination of household and population projections. This method combined with our in-depth understanding of the financial mechanics of the sector, has enabled us to understand the growth expenditure on demand-led services, growth income and the changing balance of reserve levels over the next ten years.
The solution objective is to identify the optimal mix of financial levers to arrive at a sustainable longer term financial strategy and will help you:
- build a financial forecast with comparator benchmarks
- understand the wider context for financial decisions
- appraise the impact of different financial levers and external factors
- engage wider stakeholders through a facilitated workshop
- develop a robust medium to long-term financial strategy.
What is the next step?
Other useful data and insight platforms created for local government are VfM Toolkit and CFO Insights.
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