The need for additional funding is
still dominating the meetings we are attending with MHCLG and HMT. In
addition to our conversations with government, CIPFA’s Research &
Analytics team is also looking at our funding model to see how we can
provide further support to the sector. Audit is also featuring heavily in
our discussions. It will be no surprise to many of you that we are
expecting an increased focus on financial resilience and cash flow from
A recent article in the Local Government Chronicle
explored the requirement on local authorities to reach a balanced budget
on an annual basis. At a time of crisis, it is understandable that these
challenges arise. We will be supporting treasurers across the country to
make sure the reasons behind this are understood and, to quote Gary
Fielding (Society of County Treasurers President), we do not “kick the
can of problems down the road.” Our publication - Balancing Local Authority Budgets - might
provide a good starting point.
As a CFO, the subject of
inter-authority loans is something you’ll be highly familiar with.
However in recent weeks, we have seen an increase in press scrutiny
around this topic. Back in March, our Associate Director Andy Burns wrote
an article for the Municipal Journal about the
rising trend, basing this on data compiled by our Research & Analytics
Following the 1% increase in interest
rates for PWLB loans, there was a significant change to borrowing. In the
quarter covering the period from September to December 2019 (Q3), PWLB
borrowing increased by just £258m (compared to £3.5bn in Q2) a reduction
of 93%. Conversely, inter-authority lending increased by over £1bn over
the same period, the biggest quarterly increase since 2017.
Inter-authority lending can appeal as a
low-risk strategy because it can be mutually beneficial for both the lending
and borrowing council. The priority for treasury management is to protect
capital rather than to maximise return. Councils should have formal and
comprehensive objectives, strategies and reporting arrangements for the
effective management and control of their treasury management.
for social care
There has been a lot of controversy
this week around the £600m Infection Control Fund – with concerns
around both the restrictions on its use and the associated bureaucracy.
Social care providers are reporting huge increased costs related to
infection control, mainly around PPE and enhanced cleaning, neither of
which can be covered by the fund.
New guidance has now been issued in response
to questions received from local government and care providers. It
sets out the infection control measures that the fund can be used to
support, as well as information on the distribution of funds and
The conditions of the fund put the onus
on local authorities to distribute and report on how the fund is being
used, to ensure it is not clawed back at the year end. This is creating
an administrative burden for councils for a fund from which they do not
benefit. It is also pushing the onus onto local authorities to support
the whole social care provider market – not just those they contract with
– rather than the government directly supporting this sector as they have
provided support for other areas of business.
For the duration of the crisis,
government has provided direct support to private sector businesses
across all industries and sectors. This should be reflected in how
support is provided to the private sector social care provider market.
The NAO is rapidly producing a new
programme of reports to support both Parliament and the Public Accounts
Committee (PAC) in their scrutiny of government’s response to COVID-19.
On 4 June, a PAC enquiry was launched into the whole of government
response to COVID-19, with a deadline of 11 June and a formal evidence
session on Monday 15 June. As your institute, we will respond as we have
done previously, making sure funding concerns are at the top of the
agenda. Read the whole of government response here.
government procurement: fraud and corruption risk review
This week, MHCLG published a review
into the risks of fraud and corruption in local government procurement. A
member of the CIPFA team has been on secondment with MHCLG supporting
The review sets out practical examples
and case studies showcasing how councils can strengthen their processes
and implement prevention measures at a time when the risk of fraud is
higher than ever.
The research can be found in full here.
AFEP finance leaders now have
complimentary access to Policing Insight for the duration of your AFEP
licence. An individual free subscription will provide you with access to
an online media monitor for the latest police sector news and
We are running a series of topical
webinars exploring various consequences of the COVID-19 pandemic for
local government and other public service professionals.
- The fraud implications of COVID-19. Watch here.
the economic impacts of COVID-19: Macro and local government perspectives
– 18 June 2020, 11.00 – 12.00
As the UK economy emerges from the
depths of an acute recession, the landscape is lined with fragile
expectations and great uncertainty. What will the recovery mean for local
government spending and its ability to provide a swathe of public
services that are needed now more than ever? How will this increased
demand be funded given the economic realities of the lockdown? And what
does this all mean for the government’s levelling up agenda?
Register for this webinar here.
advice portal for local authorities
Essential guidance for local
authorities on all aspects of coronavirus support can be found on the
GOV.UK website. It is being regularly updated and should act as the
definitive reference point for councils: COVID-19 guidance for local government.
Further advice and guidance can also be
found on CIPFA’s COVID-19 hub.
Please share any questions
or issues you’re experiencing to Joanne Pitt,
CIPFA Local Government Policy Manager: firstname.lastname@example.org