CIPFA's response to the proposals has focused on two key issues, namely, the relationship between local democracy and community leadership and financial accountability and, secondly, the corporate governance of local authorities.
In its response, the Institute insists that democratic renewal at a local level can only become a reality if there is effective local financial accountability, so that the local community has a real financial stake in the decisions of the local authority.
To enable local authorities to demonstrate effective corporate governance, CIPFA recommends that a code of practice should now be developed. The proposed code of practice on corporate governance would define the framework of controls to ensure openness and accountability in addition to looking at standards of behaviour. The development of this code should be led by local government.
'CIPFA believes that the concept and principles of corporate governance are highly relevant to local authorities and relate directly to the government's aim of local democratic renewal.
'A code of corporate governance will underpin the credibility of, and public confidence in, elected councillors. It will also help local authorities respond effectively to the challenges set by the government in the modernising local government agenda and to the needs of local communities.'