Resources for finance scrutiny

Posted on November 15, 2018 by Susan Vaughan.

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Resources for finance scrutiny

We think that scrutiny of council finances (and of budget development) should be year-round – a continued, sustained conversation between scrutiny and the executive. In fact, I’ve blogged about it before. However, we recognise that for many, budget scrutiny is something that involves activity clustering around the back end of the year.

For those people (or others who want to get ahead of the game for next year), this blogpost is intended to signpost you towards some useful resources:  

The first thing to say is that 2019-20 will be a uniquely challenging year for local government finance. Brexit will happen just before the beginning of the financial year – the impact of which remains to be seen, but which adds significant uncertainty. The position on business rates also remains unclear. Both of these factors make medium-term financial planning exceptionally challenging, and will bring to bear stresses on in-year budgets too.

The impact of demand pressures on adult social care and children’s services will also, of course, have an effect.

It is increasingly common to hear senior people in the sector talking about the systemic failure of local government finance. This goes beyond the financial pressures experienced by councils like Northamptonshire, and raises the real risk that even those authorities which have historically managed their finances well could find themselves in an unsustainable position.

Prioritise, prioritise, prioritise

The key to managing effective scrutiny of these issues is prioritisation. I am like a stuck record on this point. You will not be able to run through the whole budget at committee – it will be difficult even to draw out single services to look at in more detail. You will need a more intelligent system to draw out what’s important.

We talk all the time about how an understanding of risk can provide you with a really good way to do this – we published on it last year. Starting with the corporate risk register and applying members’ insight both to this and to budget documents, as they emerge, will make for a more forensic process.

This means that time at committee can be set aside for the most important issues.

It goes without saying that the more you get into the New Year, the more limited the opportunity will be for any of this to have any influence. Meaningful work has to start yesterday.

Finding out more

CfPS is working with CIPFA at the moment to develop support arrangements for councils on financial scrutiny, including publications that we hope to release over the course of 2019. In the meantime though, there are some resources out there which provide a useful starting point, and some practical tips, in understanding council finances and how they might be scrutinised.

Some of what follows are not freely accessible on the internet, but your authority’s membership of representative and sector bodies will mean that you should still be able to access them, although perhaps through your s151 officer, monitoring officer or other senior member of staff.

These documents will provide you with context; you can use this to better interrogate and understand how things work at local level. There is quite a lot here (even with this, it is by no means a comprehensive list), and not everything in every document will be relevant. We’d recommend some discrimination.

“Scrutinising public accounts: a guide to government finances” (CIPFA, 2018). Extremely detailed and comprehensive guidance, available to CIPFA members (and the organisations in which they work).

“Outcomes and public service delivery” (CIPFA, 2018)

“Moving the conversation on” (LGA, 2018). A general campaign around the Fair Funding Review about security and stability in council finances.

“Financial sustainability of local authorities” (NAO, 2018). General overview, carried out as part of the NAO’s broader sector overview responsibilities.

“The Fair funding review: accounting for resources” (IFS, 2018)

 “Hollowed out: the impact of financial localisation on neighbourhood services” (APSE, 2018)

“Home truths: CFOs on the route to integration” (CIPFA, 2017). Relevant mainly for those looking at social care finances.

“Investing in flexible public services” (CIPFA, 2017). Particularly useful primer on some of the principal contextual issues around council budgeting.

“Bricks, mortar, money” (APSE, 2017). Looking at councils’ investment in property as a means to secure local finances.

“A time of revolution? British local government finance in the 2010s” (IFS, 2016)

“Sustainable local government finance and liveable areas: can we survive to 2020?” (APSE, 2016). Although a couple of years old now this guide provides a good overview.