This week I gave evidence to the Public
Accounts Committee, covering both commercial investment in local
authorities and the local government response to COVID-19. On the current
crisis presented by the pandemic, I highlighted that financial plans are
not likely to be deliverable, particularly in social care. I emphasised
that CIPFA is calling on the government to say unequivocally that all
costs related to COVID-19 will be funded in full, and urging them to
recognise that local authorities are going to see genuine income losses
due to the measures taken in response to the pandemic and the wider economic
crisis to follow.
On the matter of local authorities
investing in commercial property, here’s a summary of the key points that
- the majority of councils use the Prudential Code
well. However, for a few councils that are overexposed through borrowing
for commercial investments, their resilience is now at risk;
- councils have local data, but they don't know
what investment decisions other authorities are making. MHCLG should
apply some structure to data collection;
- the statutory S151 officer should be a senior
- it would strengthen good governance if
responsibility fell on the council corporately not just on S151s;
- we must remain public bodies, rather than become
property development vehicles with an ancillary local authority
- the PWLB should not act like a bank when issuing
loans. The Treasury department would have to create a huge unit. A
large bureaucratic process would be burdensome and inefficient;
- when the Audit Commission was abolished, the baby
was thrown out with the bathwater. The Redmond Review is vital, as
the system won't work well without stronger external audit.
We have been notified by the Treasury
that the deadline for this consultation is set to be extended to 31st
July 2020. CIPFA welcomes this extension, as obtaining key insights from
the sector will be essential for this piece of work to have any
guidance to local authorities
At a time of speculation regarding the
financial stability of local authorities, MHCLG has provided guidance on
the powers in the 1999 Act, how they are used and what local authorities
can expect in the event of an inspection or intervention: MHCLG guidance.
for domestic abuse accommodation
MHCLG has provided £10m for safe
accommodation for victims of domestic abuse as part of a £76m fund for
charities supporting vulnerable people. The deadline for bids is Thursday
21 May 2020.
on business rates revaluation
Following the announcement of the delay
to the business rates review last week, it was perhaps no surprise to see
a postponement of the business revaluation that had been due to take
place in 2021. Removing the additional uncertainty that a revaluation
brings is understandable, but longer-term implications will need to be
considered as we think about long-term funding resilience.
New guidance - Conformance with the PSIAS
during the coronavirus pandemic - will be available shortly
from the Internal Audit Standards Advisory Board. Leadership teams and
audit committees in local government should take note of the guidance and
work with their head of internal audit to resolve any significant areas
of non-conformance created by the response to the pandemic. The new
guidance will encourage heads of internal audit to take steps to protect
their organisation and its operations.
Updated guidance has also been provided
by the National Audit Office on VFM arrangements for 2019/20. Auditors should
consider local bodies’ response to COVID-19 only as far as it relates to
the 2019/20 financial year.
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.
This week, the government published its
plan for how and when the UK will adjust its response to the COVID-19
crisis. The full strategy can be found here: Our plan to rebuild.
Further advice and guidance can also be
found on CIPFA’s COVID-19 hub.
CIPFA will be hosting a series of free
webinars over the next few months that we hope will be useful to you as
this difficult time. The first one will be focused on the challenges of
balancing local authority budgets; the role and responsibilities of the
s.151 officer and consideration of potential s.114 notices. CIPFA’s
President Carolyn Williamson and Associate Director Andy Burns will be
joined by the LGA’s Deputy CEO Sarah Pickup to explore the specific
pressures that councils are facing and how they can overcome them: Register here.
Please share any questions or issues
you’re experiencing to Joanne Pitt,
CIPFA Local Government Policy Manager: email@example.com