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A Battle of wills between local and central government
Cliff DaltonHead of Local Government Faculty,CIPFAE-mail [email protected]
cipfa.org
How well do you/ can you plan, when all around you is changing?
Understanding current Financials (resilience during austerity) The innovation agenda (what & how perceived) Financial and other Service pressures Delivering services differently Key areas for Local Government going forward…
CIPFA says/ advises
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General Election…
Policies and plans to-date, predicated on a ‘Strong & Stable’ Landslide
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Understanding current Financials - a new challenge since 8th June
…Get your calculators back out
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Some orientation – source: CIPFA FAS
For many, spending levels maintained by drawing down reserves
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Some other Financial Pressures
IR35 On payroll – from 6th April 2017 Much ignorance about this (policy, impact, implication) HMRC Assessment tool on Public Service Companies All contracts review – onus on council, even if employed through 3rd
party
Apprentice Levy – from 31st March 2017 >£3m salary = 0.5% levy (with £15k safety net) Employing >250 staff = 2.3% apprenticeship starts p.a. Will catch on-payroll assessment of IR35 PSC’s
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How current your financial risk measure?
Where are you? – Do you know? (Source: CIPFA FAS)
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The budget strategy of the localism optimist?
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CIPFA says/ advises How good / flexible / dynamic / risk assessed – your MTFS &
assumptions around income (include grants) & demand led expenditure budgets?
100% Business Rate (assuming it remains), what plans to drive regeneration initiatives?
Fair Funding – hard or soft? Odds quoted by LGA:
5/10, Business Rate Reform 4/10, Fair Funding Review
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What about other income sources? How robust are your financial plans?
Source: CIPFA resilience review (dashboard)
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Some key influencers/ opportunities Fees & Charges
Over 1,000 charging options available (do you know your Powers?) Statutory v Discretionary Policy & Process compliant
Balance sheet management Best use of buildings / spare capacity Preventative maintenance MRP policy
Doing things differently Alternative service delivery options Shared services Better procurement Reducing Fraud
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A good place to start? 85 pages regulatory powers and income
suggestions/ opportunities
www.cipfa.org/publications
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The Innovation agenda Commercial Property Companies Housing Companies Commercial lending Low borrowing rates Better use of internal cash balances
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Vehicles for Commercialism
Source: Judith Barnes, Bevan Brittan
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CIPFA says/ advises Understand the options available and characteristics of all
delivery options (see handout) Special attention where companies are for investment return
only (PAC report / Treasury concerns) Review of Prudential Code – need to maintain the guidance
nature of the code, self regulated by local government
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Service delivery models
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Service delivery models
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Treasury & Public Accounts Committee- some current concerns Clear corporate strategy? The right internal skills & capacity? Received appropriate internal advice? Knowledge of delivery vehicle characteristics? Risks understood & Communicated? Huge increases in debt for commercial return currently seen by
some as abuse of borrowing powers?
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Some other key Policy Areas for Local Government…
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Some other key Policy Areas for Local Government… and ongoing discussions with Government.
Housing Health & Social Care Integration Devolution Brexit
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Housing - CIPFA says/ advises Proposals to Housing Minister Dec ‘16
More relaxed on borrowing limits Greater freedom and flexibility on use of Capital Receipts More Brown & Greenfield site – use access Abolish current cap on rent policy X-Funding (HRA & GF)
Consultation responses Affordable housing build/ rent (1st May) Fixing broken housing market (2nd May)
CIPFA Housing Round Table (from July) Better overview of current powers and opportunities Solutions based engagement with DCLG ‘Whole sector’ package of support coming in Summer
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Health & Social Care Integration - CIPFA (Rob) says/ advises STP’s provide the best chance to best meet demand led
challenges It’s important that Local Government has sight, say and
influence New money not likely coming to LA’s – But additional
resources to Health can help local government by association More trust needed and speak the same financial language
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Devolution - CIPFA says/ advises CIPFA Devolution panel expanding to include Combined
Authority activities Agenda seems to have stalled / less emphasis over last 12
months New City Mayors / legislation may help drive forward, but Devo
map and packages are ‘messy’ CIPFA new Devolution panel from 23rd June
What is working well and where Greater emphasis on Health / Social Care What further tools needed (i.e. borrowing powers) Role of Elected Mayor and options where there isn’t one. Review and refresh of ALPS model
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Devolution: NECA (Balance sheet)
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Brexit - CIPFA says/ advises Hard or Soft… what will this mean? Greater uncertainty following Election Pressure coming from Brussels – ‘Do we know what we want?’ Pressure from the DUP – ‘Do we know what they want?’
CIPFA Round Table to keep pace and provide a suitable narrative on impact for all public services
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Question: How can ‘relaxing austerity’ lead to greater austerity?
If June 8th signified dissatisfaction with austerity? How likely a significant redistribution of grant? How likely a ‘hard’ Fair Funding re-set? How likely a relaxation of salary caps?
…And how likely and adverse impact on any authority from above will be fully funded by Central Government?
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CIPFA – Some further reading
CIPFA Qualification New from 2015 Leadership and commercial Creating experts
Transformation / Devolution Finance business partnering
Fundamentals of Business Partnering Technical and Professional Skills Transformational Change Developing Commercial Acumen
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CIPFA – Some further reading - 2
Making the case that this is about a wider picture for funding Local Government Greater fiscal powers for Local Authorities Unfunded pressures through the quantum Long term stability Equity
Financial resilience Promotion of transparency Working with DCLG and other
stakeholders (ALATS,LGA )
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CIPFA’s - Financial Resilience Review
Copyright © CIPFA 2016 protected under UK and international law.
A Battle of wills between local and central government
Cliff DaltonHead of Local Government Faculty,CIPFAE-mail [email protected]
