The most significant cost pressures that we’re seeing having an
impact on councils are in social care, with an increase in the number of
vulnerable people who will need support as the weeks go on. In
addition to supporting the market for care providers, it may be necessary
for authorities to re-establish some home-help services for vulnerable
people who rely on family members who are self-isolating for their
The business rates holiday that was announced in the Budget will
provide some cash flow relief, but income pressures as a result
of lost revenue through fees and charges are still causing
substantial problems. Districts and borough councils especially are
having to spend more quickly than they planned, all while losing
income. We can see this causing cash flow issues that will have a
significant impact on local authority finances into 2021/22.
As I mentioned in last week’s bulletin, CIPFA is looking to gather
intelligence on the key technical financial issues for public finance
practitioners, as well as on any policy issues where changes or
flexibilities may be needed to manage COVID-19.
As of today this survey is live. You will receive a separate email
containing a link to the survey, which will take approximately 10 minutes
to complete. Please submit your responses by 6 April 2020.
financial reporting for 2019/20 accounts
The immediate milestone for local government is of course the
preparation of the financial statements for 2019/20. Realistically, the
level of resource available to prepare financial statements is either not
available or, at best, severely depleted.
We have recognised that the requirement to fully prepare financial
statements at this time is not tenable. The CIPFA/LASAAC Code Board
therefore proposes to suspend the requirement to apply the Code of
Accounting Practice for 2019/20 in its current format. This will be
substituted with a forthcoming Code update which will set out a radically
reduced (or simplified) set of financial statements.
This proposal will be subject to approval from the HM Treasury
Financial Reporting Advisory Board. We are liaising urgently with the
Financial Reporting Council, representatives of the audit profession,
MHCLG and representatives of the devolved administrations for the required
We are exploring how the revised statements can account for the
general fund, collection fund, and the Housing Revenue Account balance
and also present a limited balance sheet. We hope to reveal our proposals
in detail in early April.
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: https://www.gov.uk/guidance/coronavirus-covid-19-guidance-for-local-government
Advisory Network update
MHCLG is extending the accounts preparation timetable in England for
principal authorities, with the proposed publication date of audited
accounts being pushed back to 30 September 2020.
Indeed, the whole chain of publication requirements in Accounts and Audit
Regulations 2015 is being amended, with the intention of amending the
date for public inspection of draft accounts to be the first 10 working
days of July. This will mean the accounts themselves will not need to be
signed off until 30 June.
Revised Accounts and Audit Regulations have been drafted based on those
dates, and these have been distributed for comments with the intention to
lay them in Parliament shortly.
It is acknowledged, however, that the proposed revised timeline may still
be a real challenge for authorities given the unprecedented circumstances
being faced. Therefore the suggested timetable above may still be subject
to further change. CIPFA will issue updates once the outcome is known.
Note that any deferral of the accounts publication date is likely to
impact on the circulation and submission deadline for the 2019/20 NNDR3
It had been assumed the NNDR3 form would have been out before the
system reports required running. Although the NNDR3 return has not yet
been distributed, the draft form that CIPFA have seen will require the
splitting of the Gross Rates Payable figure between current and prior
year amounts for the first time, excluding any additional yield generated
from the small business supplement.
The Treasury Management Panel bulletin will be published shortly,
including a list of treasury management related risks and advice on
liquidity during the COVID-19 crisis.
The changes to business rates collection and other funding streams has
created greater uncertainty over the amount and timing of cash flows
collected by local authorities. Authorities should consider their
investment portfolios, with a view to moving to a shorter term, more
liquid position. Authorities should not be investing long term at this
time, in case of unexpected expenditure or further unexpected loss of
income streams. If authorities are demonstrating significant issues with
cash flow, they should contact HM Treasury.
Please share any questions or issues you’re experiencing to Joanne
Pitt, CIPFA Local Government Policy Manager: email@example.com