The Chartered Institute of Public Finance & Accountancy has defended its proposed new system to measure and monitor councils’ financial resilience following criticism of the approach, insisting the organisation is not aiming to “name and shame” local authorities.
Yesterday the County Councils Network and the Association of County Chief Executives described the resilience index, which would use a ‘traffic light’ rating system, as a “blunt instrument” that could prove damaging and offers “no genuine solutions” to financial challenges.
Responding to the criticism today, Cipfa chief executive Rob Whiteman said other aspects of his organisation’s response to Northamptonshire CC’s financial demise – including a new financial management code, enhanced requirements for chief finance officers and training support for council leadership teams – had been “widely welcomed”.
However, he admitted the index had received a “mixed response”.
Mr Whiteman said: “We will listen to these concerns and have set a lengthy consultation period before responding in the early autumn, but the status quo is not an option given that the trajectory of tax, spend, savings and reserves may not be sustainable for local authorities.
“In no way is Cipfa aiming to name and shame councils, but we do believe it is our professional duty to provide objective advice to authorities at risk in order to help stabilise their financial position whilst there is still time – particularly given the National Audit Office’s report that 10% of upper tier authorities risk financial failure.
“Our approach will always be a collaborative one, but we cannot remain silent when there are material risks.”