When the government recently announced it was thinking of abolishing pennies and two pence coins – a proposal quickly reversed when the useful role these coins play for charities was pointed out – it put one in mind of the old adage ‘Look after the pennies and the pounds will look after themselves’.
Local government finance is back in the news, and not in a good way. In February Northamptonshire CC became the first local authority since 2000 to issue a so-called section 114 report on its general fund budget.
The subsequent best value inspection report gives us a sense of the true consequences of running out of money. Yet we also know that by 2020 local government will be more than £5bn light in the cash it needs to maintain services to current levels and standards.
A lot of our improvement work at the Local Government Association is about helping to make council services more efficient, but our finance support offer is playing its part in helping councils see their way through this difficult time. As resources get tighter, good financial management is even more important and aiming for long-term financial sustainability remains the goal.
It has been well publicised that it was an LGA financial review of Northamptonshire that helped to open the lid on what was happening there. The review is a peer challenge that uses finance experts – officers and members – to give councils insights into how they are doing and how they might approve in financial strategy, planning and delivery.
The Northamptonshire review was sadly too late for that council, which is why we encourage local authorities to invite us in sooner rather than later.
If a full review is not called for, our team of finance improvement and sustainability advisers – all of whom are former local government finance directors – can work one-to-one with councils to do lighter touch reviews and provide practical advice.
Meanwhile, the LGA’s data analysis website, LGInform, includes huge amounts of useful financial data that allows councils to compare their performance with others. Alongside the popular ‘spider charts’, we have recently added value for money profiles, which provide comparative information on expenditure and unit costs.
It is important that shortage of cash does not compromise local government’s traditional transparency and robustness on financial governance.
We have been working with the Chartered Institute of Public Finance & Accountancy and others to ensure the sector’s approach to preventing, investigating and prosecuting fraud is as good as it can be.
In stringent times it is vital that we make the best use of every penny.
Paul Bettison (Con), chair, LGA improvement and innovation board; leader, Bracknell Forest Council