A roll forward budget for the next financial year would be “totally unacceptable” and must include the billions of pounds of ‘temporary’ funding councils currently receive, the new president of the Chartered Institute of Public Finance & Accountancy has warned.
In an interview with LGC on the day she took on the role, Carolyn Williamson said the sector had “exhausted efficiencies, innovation, transformation”.
Ms Williamson, who is deputy chief executive and director of corporate resources at Hampshire CC, said although she would have liked the government’s fair funding review and the move to 75% retention of business rates to go ahead next April, she recognised this was not “realistic” in the time available.
“Government must recognise that we need significant injection of additional financial resources to tide us over for that year until they can properly review the needs,” she said.
The fair funding review will change the way funding is distributed between councils however the government has yet to consult in detail on the proposed formulae. Along with the expected delay to the government’s spending review, which will set the quantum of funding available to councils, this means councils do not know how much funding they can expect to receive in 2020-21.
In 2019-20 councils received almost £2.5bn through the improved better care fund, winter pressures grant and social care support grant as well as funding for troubled families programme. Asked whether she was confident the government would continue to make these funding pots available next year, Ms Williamson said there was “no alternative but to assume that government will continue that funding”.
“It can’t be a roll forward budget. That’s totally unacceptable,” she said.
Ms Williamson said councils had built that funding into their base budgets “because the demand is already there”.
“[Without it] we would be left in a position as local authorities where we’ll be closing doors on demand from vulnerable people which we can’t do,” she said.
“I think everybody has exhausted efficiencies, innovation, transformation… what we are talking about now is real demand pressures because more children are in care and more older people need support.”
Ms Williamson takes on the Cipfa residency following a challenging year for the organisation, during which it has come under fire from some council finance directors for its proposed financial resilience index and financial management code.
Councils would be required to demonstrate they complied with the code which aims to support financial planning. Ms Williamson acknowledged the original draft financial management code “came out looking like the old use of resources assessment” used by the Audit Commission which was “hugely time consuming and not very popular”.
She said Cipfa had listened carefully to the responses and predicted the revised code, due to be published in the autumn, would be much more welcome.
“The first draft was going into far more detail around compliance to the nth degree. Now it will come out with a requirement to comply with principles,” she said.
Publication of the resilience index, which would score councils financial health, was delayed for a year following concerns it would present an over-simplified hierarchy of performance.
Ms Williamson predicted this was also likely to be better received when it is relaunched later this year following further development in conjunction with finance officers.
“I will be seen as being very helpful and supportive to the chief finance officer. Getting the combination of indicators was always going to be a challenge,” she said.
During her speech to the Cipfa conference this week, Ms Williamson said during her year as president she would focus on trying to “future proof the profession”, including through a focus on diversity, inclusion and partnership working.