Energy Efficiency and Sustainability

07.07.17

Councils warned to look out for five key ‘financial warning signs’

Councils have been told to watch out for five key ‘warning signs’ of financial pressure, including a rapid decline in reserves, in order to build resilience into all aspects of planning and operations.

The message has been sent by the Chartered Institute for Public Finance and Accountancy (CIPFA) which has released guidance for councils in its new report, ‘Building Financial Resilience’.

Four other warning signs mentioned by CIPFA include a failure to plan and deliver savings in service provision and the shortening of medium-term financial planning.

Councils were also told that firm objectives were missing from savings plans, and a tendency for unplanned overspends should also give prompts to councils that all is not well with their fiscal strategies.

The report laid out a number of key measure councils needed to put in place to ensure their finances were kept in check. This includes ensuring the right financial management systems are working effectively, as well as using benchmarking data such as comparing costs, income and activity levels with similar authorities.

The need for a single consolidated living document that tracks its saving plans and managing reserves effectively was also emphasised by CIPFA.

“In the face of growing demand, tightening funding and an increasingly complex and unpredictable financial environment, councils must be financially resilient; meaning they must remain viable, stable and effective in the medium to long term,” said Sean Nolan, director for local government at CIPFA.

“Austerity has battered the sector for close to a decade, while increased demand and cost pressures have left some councils at the brink.”

Nolan added that other, more positive changes, such as a trend towards greater self-sufficiency and local leadership had allowed some areas to flourish, while others have struggled to reap the benefits of these reforms.

“What we are seeking to do now is to help councils spot the warning signs of financial stress and take the right steps towards resilience,” he concluded.

Have you got a story to tell? Would you like to become a PSE columnist? If so, click here.

Comments

There are no comments. Why not be the first?

Add your comment

 

related

public sector executive tv

more videos >

latest public sector news

November too late for pay cap decision, GMB says

25/09/2017November too late for pay cap decision, GMB says

The GMB has criticised the government’s choice to defer the decision of ending the public sector pay cap until the Autumn Budget on 22 Nove... more >
LGA: TfL Uber decision shows need for ‘urgent reform’ of outdated taxi laws

25/09/2017LGA: TfL Uber decision shows need for ‘urgent reform’ of outdated taxi laws

Councils have this week declared that outdated taxi laws need to be urgently reformed following Transport for London’s (TfL’s) decisi... more >
Councils falling short of preventive care obligations

22/09/2017Councils falling short of preventive care obligations

Councils are failing to meet their obligations to prevent, reduce or delay the need for care as set out in the Care Act 2014. New research p... more >

editor's comment

14/08/2017Time for reflection

A lot has happened since the last edition of PSE was published. In particular, the snap general election delivered an astounding result that many of the pollsters and political experts could not have predicted when Theresa May initially called for it back in April. Chris Painter, Professor Emeritus at Birmingham City University, provides ... read more >

last word

The importance of openness after Grenfell

The importance of openness after Grenfell

Following the recent Grenfell Tower tragedy, Lord Porter, chairman of the LGA, argues that if the public are going to have faith in the safety testing process then everything must be out in the o... more > more last word articles >
South Yorkshire devolution in doubt as councils clash over next steps

19/09/2017South Yorkshire devolution in doubt as councils clash over next steps

South Yorkshire’s devolution deal took a serious knock today after a statement from the Sheffield City Region (SCR) revealed that two councils, Barnsley and Doncaster MBC, have refused to b... more >
Male LCR cabinet urged to give up their seats for female nominees

15/09/2017Male LCR cabinet urged to give up their seats for female nominees

The entirely male cabinet at the Liverpool City Region (LCR) have this week been urged to give up their seats by the Women’s Leadership Group (WLG) in a drive towards a more gender inclusiv... more >

the raven's daily blog

How would local government look under a Labour government?

25/09/2017How would local government look under a Labour government?

Few will disagree with the statement that the current landscape of local government is one that has been shaped by seven years of Tory influence. Harsh austerity measures have seen pressures on council-run services, as well as the NHS, mount sharply as demand increases. The resurgence of the Labour Party in June’s snap election... more >
read more blog posts from 'the raven' >

comment

Support for councils following Grenfell

04/09/2017Support for councils following Grenfell

Ian Moore, CEO of the Fire Industry Association (FIA), discusses the wider lessons of the tragic Grenfell Tower fire and what measures and assess... more >
A quiet revolution

04/09/2017A quiet revolution

Dermot Ryan, programme director at NHS Digital for the Health and Social Care Network (HSCN), talks to PSE about the importance of moving to the ... more >
Effective leadership in uncertain times

04/09/2017Effective leadership in uncertain times

Dr David Beech, lecturer in people management at Salford Business School, argues that continuous renewal and progress is fundamental to effective... more >
Refocusing professional development

04/09/2017Refocusing professional development

Graeme McDonald, managing director of Solace, discusses the importance of taking time out to focus on learning, especially in the ever-changing l... more >

interviews

‘The HSCN is the realisation of industry best practice’

30/06/2017‘The HSCN is the realisation of industry best practice’

Keith Smith, public sector business development manager at Virgin Media Business, tells PSE’s Luana Salles that health and social care orga... more >
HSCN: The enabler for a more joined-up public sector

26/06/2017HSCN: The enabler for a more joined-up public sector

Mark Hall, Chief Assurance Officer at Redcentric, discusses NHS Digital’s project, the new Health and Social Care Network (HSCN) and what b... more >
Maintaining the momentum for further devolution

25/04/2017Maintaining the momentum for further devolution

Ahead of this year’s mayoral elections, Lord Kerslake, the former head of the Civil Service, tells PSE’s David Stevenson why the argu... more >
New social care funding misses the point

13/04/2017New social care funding misses the point

Clive Betts MP, chair of the Communities and Local Government (CLG) Committee, reflects on the social care funding released in this year’s ... more >

public sector focus

View all News