Latest Public Sector News

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 >

last word

Prevention: Investing for the future

Prevention: Investing for the future

Rob Whiteman, CEO at the Chartered Institute of Public Finance (CIPFA), discusses the benefits of long-term preventative investment. Rising demand, reducing resource – this has been the r more > more last word articles >

public sector focus

View all News

comment

Peter Kyle MP: It’s time to say thank you this Public Service Day

21/06/2019Peter Kyle MP: It’s time to say thank you this Public Service Day

Taking time to say thank you is one of the hidden pillars of a society. Bei... more >
How community-led initiatives can help save the housing shortage

19/06/2019How community-led initiatives can help save the housing shortage

Tom Chance, director at the National Community Land Trust Network, argues t... more >

interviews

Artificial intelligence: the devil is in the data

17/12/2018Artificial intelligence: the devil is in the data

It’s no secret that the public sector and its service providers need ... more >

the raven's daily blog

Utilising data to best deliver meaningful public services

14/11/2019Utilising data to best deliver meaningful public services

Public Sector Executive’s Matt Roberts explains how living in a modern, interconnected world, as we do, means public sector organisations cannot afford to ignore the rol... more >
read more blog posts from 'the raven' >

editor's comment

25/10/2017Take a moment to celebrate

Devolution, restructuring and widespread service reform: from a journalist’s perspective, it’s never been a more exciting time to report on the public sector. That’s why I could not be more thrilled to be taking over the reins at PSE at this key juncture. There could not be a feature that more perfectly encapsulates this feeling of imminent change than the article James Palmer, mayor of Cambridgeshire and Peterborough, has penned for us on p28. In it, he highlights... read more >