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New Cipfa president urges renewed focus on medium term financial planning

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Councils need to strengthen their medium term financial planning, according to the new president of the Chartered Institute of Public Finance & Accountancy.

Addressing Cipfa’s annual conference in Manchester this morning, Andrew Burns also warned Brexit would have a “profound” impact on public services while, despite recent speculation to the contrary, austerity will continue.

Mr Burns said: “Nearly a decade after the 2008 financial crisis it’s looking increasingly likely austerity will extend long into the next decade, despite commentaries saying austerity is over. The numbers don’t suggest that’s going to be the case. So it’s more important than ever that organisations ensure they have the necessary resilience to deliver financial savings in order to manage financial shocks whilst pursuing ambitious goals.”

Key to that is ensuring councils have “resilient” medium term financial plans in place.

“These medium term financial plans need to focus on our capital investment programmes and the assets in our balance sheets and not just the revenue budgets which get the most attention,” said Mr Burns, who is also director of finance and resources at Staffordshire CC.

There has been “significant” recent media coverage on councils’ commercial investments, said Mr Burns. While these investments are “not new”, Mr Burns said: “The due diligence needs to be thorough and in many cases it is and has been.”

In light of the recent media attention, Mr Burns said Cipfa planned to “strengthen” its code used by councils when taking commercial decisions to “set higher bars for independent and expert advice” and ensure “governance is really clear and transparent”.

Britain’s decision to leave the European Union will have a “profound legal, technical, and financial implications”, said Mr Burns. He added: “Whilst the government has yet to give us the clarity we need on their negotiating position consensus is emerging that if a bad deal is struck that will have an impact on the effectiveness of public services.”

A Brexit advisory commission has been set up by Cipfa. Mr Burns said: “[Brexit] will have a profound impact on public finances and we also need to understand the strain it will place on the public sector due to increasing uncertainty around for example the rising number of vacancies in health and social care [services].”

Mr Burns called for better alignment and collaboration between public services, beyond health and care, and said integrated reporting should focus “not just on financial outcomes but the value created by public services”.

“In this era of diminishing resources and greater demands, greater collaboration and not just competition is critical to a successful and sustainable future,” he said.

While adults and children’s social care remain “chief cost pressures”, children’s social care is a service area “of particular concern”, said Mr Burns.

He said there was an “urgent need” to find a solution to creating a sustainable health and social care system as it is “at breaking point”.

Meanwhile, Mr Burns said he wanted councils to make better use of digital developments and data to sustain and improve public services.

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