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

Sent:                                    06 May 2020 09:42

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

COVID-19 continues to present challenges for local government, but I think it’s fair to say many areas of the sector are starting to hit their stride as a revised sense of normality begins to emerge. It seems that now could be a good time to begin opening up the conversation around what the future could look like post-COVID for those in the public finance profession. 

The allocation of the most recent round of emergency funding showed that fees and charges are as vulnerable to risk as any other element of local government funding. Part of the conversation going forward will need to be around how we diversify sources of income, but also how we plan for higher risk scenarios.  

Budget setting and forecasting will look different. In the past, these activities have been based on historical data and a well understood set of demand parameters. Those trends will be significantly disrupted as a result of the pandemic. 

The post-COVID world is going to necessitate the development of skills that we have been talking about for quite some time – cultural embedding of good financial management, predictive modelling, expanded risk management – more quickly than would otherwise have been the case. So what is my advice to you? Take this time to consider your professional development. Because the speed of the sector’s recovery may very well depend on it. 

Accounts Closure 2019/20 

Last week we were able to send out the 2019/20 year-end bulletin. There are items that are specific to each jurisdiction. English authorities in particular will want to know about the guidance on accounting for the dedicated schools grant (DSG) and the changes to the financial reporting deadlines for 2019/20.  

There is also helpful advice within the bulletin on the financial reporting issues associated with the COVID-19 pandemic. 

Going Concern

All CFOs will wish to have regard to the advice in the year-end bulletin on the going concern basis of accounting. The provisions in the Code on the going concern accounting requirements reflect the economic and statutory environment in which local authorities operate. These provisions confirm that they have no ability to cease being a going concern as described by IAS 1 Presentation of Financial Statements (ie management deciding to liquidate the entity or cease trading). 

The going concern assumption under the Code is drawn up to assume that a local authority’s services will continue to operate for the foreseeable future. This is despite the impact of COVID-19 on local authority financial sustainability - the going concern basis of reporting in the Code and the rationale behind it remains unchanged.

Pressure on housing 

The housing costs being borne by local government due to COVID-19 are currently being overshadowed by the discussion around social care. However, it is essential than when we come out of this crisis, we do not see funding for one area suffer as a result of another. To ensure that the investment and funding needed to cope with ongoing housing pressures remain a priority, we have started to pull some interesting statistics from our new data tool CIPFA Housing 360. Knowing that it could be 2037 before all households on the waiting list for council housing in England are re-homed gives us good evidence to build a strong case for additional funding, both for delivery of housing targets and for supporting requests around social care. 

By-elections delayed until May 2021  

The Local Government and Police and Crime Commissioner (Coronavirus) (Postponement of Elections and Referendums) (England and Wales) Regulations 2020 (SI 395/2020) were made on 3 April, laid before Parliament on 6 April and came into force on 7 April.

The Coronavirus Act 2020 postpones the elections due to be held on 7 May 2020 to 6 May 2021, including Police and Crime Commissioner (PCC) elections in England and Wales. The Act extends the term of office of the current incumbent for a year and reduces the term of office of the person elected in the postponed elections from four to three years (to allow a return to the usual electoral cycle).

Networks update 

Police and Fire Network 

Regulations on Police and Crime Panel Meetings 

Part 4 of the Local Authorities and Police and Crime Panels (Coronavirus) (Flexibility of Local Authority and Police and Crime Panel Meetings) (England and Wales) Regulations 2020 (SI 392/2020) allows Police and Crime Panels in England and Wales to hold meetings remotely, including by video conferencing, live webcast, and live streaming. It also allows public and press access to Police and Crime Panel meetings to be complied with through remote means and website access.

Treasury Management Network 

CIPFA’s Treasury and Capital Management Panel has issued CIPFA Bulletin 04 with general guidance to complement the Prudential and Treasury Management Codes, as well as guidance in response to challenges raised by COVID-19.

Finance Advisory Network

Included in the year-end bulletin are many issues that have been raised with CIPFA and FAN directly over recent weeks, including: 

  • McCloud and Sargeant Judgements
  • NNDR s31 grants
  • the impact of COVID-19 on asset measurement and impairment
  • accounting standards issued but not yet adopted. 

There are also three appendices covering the updated DSG disclosure note requirements, IFRS 16 and a useful checklist of potential COVID-19 issues for narrative reporting.

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

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 Pitt,
CIPFA Local Government Policy Manager: joanne.pitt@cipfa.org


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