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

Sent:                                    13 May 2020 10:34

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

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 were raised:

  • 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 director; 
  • 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 function; 
  • 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; and 
  • 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.

PWLB consultation 

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 meaning. 

MHCLG 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.

Funding 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. 

Delay 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. 

Networks Update 

Governance Network 

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.

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.

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: joanne.pitt@cipfa.org

Rob Whiteman
Chief Executive, CIPFA


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