News

CIPFA ‘blown away’ by response to council financial resiliency index, analysis due in October

CIPFA has said it has been “blown away” by the amount and level of response to its publishing of a proposed financial resiliency index that would provide an early warning system to prevent local authorities from reaching financial difficulties like that of Northamptonshire County Council.

In a statement released today, CIPFA chief executive Rob Whiteman said the scale and quality of the responses received “shows the importance of the subject,” and that debate is much needed.

The finance-rating tool would draw on publicly-available information for a ranking-style index of all local councils across the country, so that timely action could be taken at a local level to prevent spending shortages, and potentially bare-bones ‘Core Offers’ of council services, from occurring.

However, the proposals have been criticised by some: last month Solace outlined a number of “serious misgivings” with the scheme, noting that the index may not take into account wider context of a council’s spending or its use of reserves.

Bosses from the County Councils Network and the Association of County Chief Executives also warned that the “well-intended” proposals from CIPFA will be a “blunt instrument” instead.

In response, Whiteman said today: “We are positively blown away by the scale and quality of the responses we have received, which shows the importance of the subject and that debate is much needed. 

“The many thoughtful and insightful comments will help us create a tool that works for individual local authorities and strengthens the sector. As important for us, as a body representing professionals who owe a direct duty to the public to act in their interest, is the welcome and quite widespread feedback that we are right to prompt much needed debate where we believe it’s needed.  

“CIPFA will always play a leading role in lobbying for more resources for councils, but the consultation has demonstrated that accountants also play a unique role at times to provide uncomfortable challenge.”

The chartered institute will issue its analysis of those responses by early October, along with clarification on the next steps. In the meantime, it will continue to engage sector representatives and finance leaders.

Enjoying PSE? Subscribe here to receive our weekly news updates or click here to receive a copy of the magazine!

Image credit: LPETTET