From:                                   Rob Whiteman <cipfa@email.cipfa.org.uk>

Sent:                                    15 April 2020 16:35

To:                                        Moore, Ashleigh

Subject:                                CIPFA COVID-19 Bulletin

 

Weekly update on coronavirus

CIPFA | The Chartered Institute of Public Finance & Accountancy


CIPFA COVID-19 Bulletin

Key financial challenges

As the pandemic rolls on, the message from government to local authorities has largely been “spend what you need to spend, and we will reimburse you”. We expect that councils will need to capture information around additional costs, income losses and impacts from delaying savings programmes in a way that can be verified by a light-touch audit at a later date.

CIPFA will continue to work with MHCLG, HM Treasury and other stakeholders to get greater clarity on the exact financial support that local government will be given to fight COVID-19. 

We are also in discussion with government on the present risk that some local authorities may not be able to reach a balanced budget position. To that end, we urge any authorities alive to the possibility of an unbalanced budget position due to COVID-19 to alert MHCLG at the same time as the council executive. Any prohibitions on spending should not be imposed until MHCLG have responded with what support and advice they are able to offer. At this difficult time, section 114 notices should continue to be used only as a last resort. 

And last, but by no means least, you may have seen on social media that CIPFA has launched a new coronavirus response hub on our website.

We want the hub to be responsive to what you need from CIPFA at this challenging time, so please get in touch if there’s something more you want to see from us online. 

CIPFA survey response 

In response to the pace of change in the sector caused by COVID-19, CIPFA issued a snap survey to gather insights from CFOs. This focused in on understanding and implementing possible technical accounting changes. We wanted to understand the challenges CFOs are facing, what you’re doing in response, and how we might best support you. A massive thank you to the over 180 CFOs who responded to our request in the five days it ran. Capturing your thoughts, even at a high level, supplies us with invaluable intelligence as we look forward.

Overwhelmingly, the most significant financial issue reported was the concern around the delivery of the 2020/21 budget due to cost pressures, income losses and the inability to deliver savings plans. The response to changes to section 114 was more mixed and has informed our discussions with MHCLG regarding the best way to support the sector.

Your responses around streamlining the accounting code provided a 360 degree view of what this would mean. Although circumstances have since moved on, the feedback we received will be put to good use when this crisis is over and our thoughts turn to the financial reporting elements of the Redmond Review – but that is for another time. 

The survey also explored the changes that you have already implemented to support vulnerable people and businesses. We were impressed to see such a comprehensive range of actions, covering support for service users and suppliers. 

In total, 89% of respondents have already made changes to enforcement action relating to outstanding debt, 70% had already implemented early payment to suppliers and 63% had suspended or waived charges for services. Payments to suppliers included not just hard-hit leisure services but also groups such as those that provide home to school transport. 

The survey made it clear that changes to treasury management were also being used, with 38% already having already made decisions and 40% thinking of implementing changes.

This sector-wide response has highlighted the speed and resourcefulness of the public sector and the importance of the financial professional within it. You told us very clearly that the delivery of the 2020/21 budget was your biggest concern and rest assured we will focus on supporting you through that over the coming months. 

Update from Networks 

Finance Advisory Network and Better Governance Forum

The Annual Governance Statement for 2019/20 - Matters to consider as a result of the coronavirus pandemic

The AGS assesses governance in place during 2019/20, so the majority of the year will be unaffected by coronavirus. The conclusion on whether or not governance is fit for purpose should reflect normal operations. However, coronavirus will have impacted on governance during March 2020 and authorities need to ensure that the AGS is current at the time of its publication. It is essential that the AGS reflects the impact of the COVID-19 pandemic on governance. Where necessary, a second conclusion on the adequacy of governance arrangements during this period could be included to make clear the impact. 

The impact on governance may fall into the following broad categories: 

* impact on business as usual delivery of services;

* new areas of activity as part of the national response to coronavirus and any governance issues arising;

* the funding and logistical consequences of delivering the local government response;

* assessment of the long-term disruption and consequences arising from the coronavirus pandemic.

Once the crisis is over, local authorities are likely to conduct a review of the lessons to be learned from its response. This could be a suitable area for inclusion as one of the organisation’s significant governance issues.

Children’s FAN 

Financial support for schools 

On 7 April the Department for Education published guidance giving details on additional funding available to schools to cover costs related to the coronavirus outbreak. It covers the period up to the end of the 2019/2020 summer term. Full details with further guidance about the claims process will be published in June.

Pension Network 

Following the meeting of the CIPFA/LASSAC board regarding financial reporting for 2019/20, the status quo position will hold for full application of the 2019/20 code for both Local Authority and Pension Fund Accounts.

Revenues and Benefits Network 

2019-20 NNDR3 

With the date of the accounts being pushed back, MHCLG have also pushed back the deadline for the NNDR3 return.

The submission deadline for the NNDR3 will be 31 July for the unaudited version and 30 November for the audited. 

Local Housing Allowance Rise 

The increase in LHA rates back to the 30th percentile of commercial private rented sector (PRS) rents announced by government will result in additional income for PRS universal credit claimants with housing costs and for those still receiving housing benefit, in some cases by significant amounts. This will reduce the number of evictions and homelessness and possibly the associated costs. However, local authority implications will include: 

* increase in administration resources required to process amendments to existing housing benefit claims in the PRS and support for those making new claims for universal credit;

* potential delays in the increased payments being assessed and paid by the Department for Work and Pensions in universal credit claims and local authorities in housing benefit claims;

* increased administrative and financial pressures on local council tax support schemes;

* increased pressure on demand for discretionary housing payments for those brought into the benefit cap.

Adapting to the new normal

At this difficult time, councils’ crisis management plans are being tested to their limits. To help support you, we’re giving you access to two new tools from leading advisory group Deliver Associates. Created by former adviser to Tony Blair Sir Michael Barber, the resources provide top tips and a checklist both for managing the current crisis and dealing with everything else when we come out the other side of this. 

COVID-19 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

Frequently Asked Questions

Please share any questions or issues you’re experiencing to Joanne Pitt,
CIPFA Local Government Policy Manager: joanne.pitt@cipfa.org

 


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