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
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.
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
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
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.
Advisory Network and Better Governance Forum
Governance Statement for 2019/20 - Matters to consider as a result of the
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
* 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
* 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
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.
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
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.
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
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
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
CIPFA Local Government Policy Manager: firstname.lastname@example.org