The weekend saw some welcome progress in terms of resources allocated
to local government to fight COVID-19. On Saturday, the government
announced an extra £1.6bn for local authorities to support escalating
costs at this challenging time.
While this funding is certainly a step in the right direction, it goes
without saying that more will be needed. Councils are seeing reduced
income at a time when demand is set for a rapid rise, and this is
alongside ongoing systemic funding issues that are yet to be solved. It
is vital we ensure that councils can maintain services such as adult
social care, as well as provision for the homeless and for those in other
central share payments to ease cash-flow burden
One of the most immediate impacts of the coronavirus has been the
challenges to cash-flow. To ease this, MHCLG have announced that billing
authorities will not have to make the NNDR 1 2020/21 central share
payments for the first three months of 2020/21. Usually these are
scheduled evenly throughout the year. This is a deferral - they will
still have to be paid later in the year.
The payments relating to the first three months will instead be
collected over the period October - March 2020/21 and will be detailed in
regulations due to be laid shortly. Payments from billing authorities to
major preceptors based on NNDR 1 2020/21 do still have to be made in
accordance with the normal schedule of payments and tariff payments do
still have to be made.
CIPFA’s survey exploring the impact of COVID-19 on local government
identified that 70% of respondents had made early payments to suppliers
and over 30% had issued additional fees to providers. While not all of
these will relate to social care, it is important that the provider
market is supported, as set out in the guidance for commissioners.
Respondents provided further details on costs of social care, including
the additional recruitment of care workers and purchase of care home
places in expectation of increased demand.
Further, the enhanced hospital discharge process and easing of the
requirement for financial assessments and assessments of need under the
Care Act 2014, will mean that finance teams will need to think about the
implications for the cost of care they are providing during the
The following sources provide further detail on these issues:
Update from the
Pulling together all the recent changes, FAN and CBRS have summarised
the accounting impact of government announcements on COVID-19 support,
- Expanded Retail Discount 2020/21
- Business Grants
- NNDR 1 2020/21 S31 Grants paid in advance
- Deferral of Central Share
- Council Tax Hardship Scheme
This has been included in our FAQs, a link to which can be found at
the end of the newsletter.
CIPFA and the
CIPFA is working with other standard setters through the IASAB board
to put out guidance to internal auditors in the public sector on managing
the impact of the pandemic on internal audit in accordance with PSIAS. We
hope that the guidance will be confirmed soon and will publicise it as
soon as possible.
Accounting Panel year-end bulletin
The LAAP year-end bulletin is currently being finalised and will be
circulated shortly. This year’s bulletin has been made more complex than
usual due to the impact and uncertainty that COVID-19 has created around
many areas of financial valuation and judgements within the accounts.
Alongside this, the panel have taken time to liaise with stakeholders,
regulators and the audit community to consider the accounting guidance
required to deal with accounting for accumulated balances in reserves for
Dedicated Schools Grant and the implications of the McCloud and Sargaent
Judgements for measurement of pension liabilities. CIPFA will continue to
support practitioners in the sector through its network services and
technical enquiry support.
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
Further advice and guidance can also be found on CIPFA’s COVID-19 hub.
Frequently Asked Questions
Please share any questions or issues you’re experiencing to Joanne
CIPFA Local Government Policy Manager: email@example.com