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Councils lose confidence in risk assessment

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Council leaders’ confidence in identifying financial risk has plunged as they struggle to cope with persistent cuts and staff losses, a report by a top accountancy firm has found.

Confidence levels dropped 11 percentage points from 98% in 2011 to 87% in 2012, according to a Grant Thornton’s survey of 65 leaders.

The report also reveals “worryingly” signs of authorities’ ability to work with work with other organisations.

“Confidence has fallen in audit committee ability to respond to risks and to annually evidence the value it brings to council governance,” the report states.

“Although external alliances are increasingly seen as a key part of the solution to more efficient delivery, 21% of survey respondents are not clear about council roles when working in partnerships.’

Paul Hughes, the report author and director of public sector governance at Grant Thornton, said local government was in a “difficult place”. “There is increased pressure and complexity, reductions in funding through the comprehensive spending review. There is also ever-increasing demand for a lot of services such as social care.”

The drop in confidence levels had been from a high base, he added.

The lack of certainty about ‘partnership’ working was one of the most marked changes in the survey, Mr Hughes said. “The reasons for that are linked to funding reductions. The concept of working partnership now applies at a deeper level than councils are used to. In the past it was a matter of choice, now it is a matter of necessity as councils are challenging themselves to do more for less.”

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