Local Authority Finance
 Director e-newsletter

Welcome to the fifth edition of CIPFA’s local authority finance director e-newsletter. If you have any comments or suggestions on what we might usefully cover in the future, please contact Kerry Ace at kerry.ace@cipfa.org.uk  or Alison Scott at alison.scott@cipfa.org.uk

NEWS

Forthcoming update of the CIPFA/SOLACE Framework – Delivering Good Governance in Local Government

CIPFA in association with SOLACE developed Delivering Good Governance in Local Government and accompanying guidance notes which have been successfully used throughout the local government sector.  It was always our intention that the Framework should be reviewed on a regular basis to see how it is working in practice and to consider any changes that might be necessary to ensure that it remains  ‘fit for the purpose’.   Delivering Good Governance in Local Government was published in 2007 and given the changes that local government is currently undergoing, we believe that an update is now timely.

A brief questionnaire asking about authorities’ experience in using the CIPFA/SOLACE Framework is being issued to all local authority chief executives.  We wish to take initial soundings and give authorities the opportunity to influence the update which is to start later this year.  There will be a further opportunity for local authorities to give their views when we undertake a formal consultation exercise on the revised draft in 2011.

The Role of the Head of Internal Audit

The draft Statement The Role of the Head of Internal Audit was launched by CIPFA’s President at CIPFA’s Audit Conference on 19 May.  It was emailed to senior audit and finance staff across the public services and also to key interest groups and stakeholders.  The Statement has had extensive coverage on CIPFA’s website and through CIPFA’s weekly ENews, Spreadsheet and Viewpoint and an article for On Account. 

The consultation period ended on 10th September and the Steering Group responsible for this project considered the responses at its meeting on 4 October. It is intended that the final Statement will be launched in late November and a version for local government will follow.

The Future of Local Audit : Issues for Consideration

This paper sets out the Audit Commission’s views on the issues that need to be considered in developing a new framework for local audit. Click here to view this paper.

CURRENT CONSULTATIONS

Equity and Excellence : Liberating the NHS (DoH)

The Government White Paper on Equity and excellence: Liberating the NHS, includes the following wording on public health:

PCT responsibilities for local health improvement will transfer to local authorities, who will employ the Director of Public Health jointly appointed with the Public Health Service. The Department will create a ring-fenced public health budget and, within this, local Directors of Public Health will be responsible for health improvement funds allocated according to relative population health need. The allocation formula for those funds will include a new “health premium” designed to promote action to improve population-wide health and reduce health inequalities.

For full details, click here Equity and excellence: Liberating the NHS

Local Referendums to veto excessive Council Tax increases

CIPFA anticipates being consulted by government further about the above proposal from CLG. If there are points you would like CIPFA to take account of arising from your own consideration of the 30 July letter to authorities on this proposal from CLG’s Richard Harries, Deputy Director, Local Government Finance, please feel free to email them to alison.scott@cipfa.org.uk  

CIPFA’s response to the CLG’s consultation can be found at here.

RESPONSES

New Homes Bonus Scheme
CIPFA has responded to the Housing Minister’s letter of 9 August to Local Authorities, in which he set out proposals for the New Homes Bonus Scheme. To read the response in full, please click here

Localism Inquiry
CIPFA has submitted comments to the Communities and Local Government Committee Inquiry into Localism. The terms of reference for the Inquiry can be found here.

NEW GUIDANCE ISSUED

LAAP Bulletin 82 Guidance on the impairment of deposits with Icelandic banks ( updated)
LAAP 82 provided advice on estimating the impairments to be recognised in relation to deposits in Icelandic banks. The guidance was based on published information at the date the bulletin was issued and since then two updates have been issued. This update sets out the position at the end of August 2010 and provides advice on estimating the impairments based on the latest position.

Children's Trusts: The Essential Financial Management Companion (Fully Revised Second Edition 2010)
The second edition of this guide from CIPFA provides comprehensive finance coverage of this important and constantly developing area. It is aimed at keeping trust managers and finance leads in command of their finances whilst enabling them to plan ahead strategically for children’s trusts.

A Comprehensive Guide to Local Government Finance 2010 Edition (2010)
Since last year’s guide (formerly known as the Councillors’ Guide to Local Government Finance), we have seen another 12 months of economic uncertainty. This electronic guide, published on CD-ROM, will be an invaluable resource for authorities, coming in the midst of a time of such change.

UPDATES FROM SCOTLAND AND WALES

Scotland

CIPFA Joint Submission on Local Tax Arrears
CIPFA and the CIPFA Directors of Finance Section have made a joint submission to John Wilson MSP on his proposed bill on the enforcement of local tax arrears.  The proposal is to restrict the amount of time local authorities have to collect council tax arrears to five years and to withdraw the summary warrant process.  CIPFA and the Directors of Finance tested the proposal against a specific tax principle.  The conclusion was that the proposal failed that test.  CIPFA also estimated that the £17M annually is collected from debts over five years old and that this would be lost to local authorities as a result of the proposal.
Click here to download the document.

Scottish Government Consults on LGPS Audit Arrangements and Officer/Member Remuneration Disclosures
The Scottish Government has issued a consultation document proposing:
The requirement for a separate audit arrangement for Local Government Pension Scheme. Combined with the requirement to produce a separate LGPS annual report this would mean that LGPS financial statements would no longer be included in local authority financial statements.

The requirement to disclose specified officer and member remuneration as part of a ‘Remuneration Report’ within local authority financial statements. As such local authority remuneration reporting would be more closely aligned with practices elsewhere in the public sector. Proposed key elements of the Remuneration Report are:

• remuneration policy and details of the remuneration committee to be provided
• senior officer and senior elected member remuneration to be disclosed on a ‘post and name’ basis
• the requirements would apply to the authority and any subsidiaries
• for subsidiaries the Chief Executive or equivalent and any employee with remuneration over £150K to be specifically disclosed
• for subsidiaries the authority would be responsible for ensuring that the subsidiary annual report was available via the authority website
• the current ‘banding’ disclosures for employees with remuneration of over £50K remains, with bands narrowed to £5K
• a proposed remuneration definition is outlined including salary, bonuses, performance pay, expense allowances, ‘loss of office’ compensation, benefits in kind and employers’ pension contributions
• senior officers and employees with remuneration over £150K details to be separately disclosed by post and name: one table for remuneration, another table for pension entitlements
• ‘senior officers’ is aimed at the ‘top management tier’. A proposed definition is provided as a basis
• senior elected members relates to the Council Leader, Civic Head and Senior Councillors receiving enhanced remuneration
• senior elected members would also require two tables: one table for remuneration, another table for pension entitlements
• the consultation includes example disclosure tables for the required information.

To see the consultation document click here.

To download the response form click here.

Wales

Wales focuses on sustainable accounting
During HRH the Prince of Wales’s recent countrywide tour to encourage people to become more energy efficient, CIPFA Wales Cymru together with colleagues representing the other professional accountancy bodies were invited to an audience with HRH on the Royal Train.

A collaborative project on sustainability between the accountancy bodies in Wales is about to bear fruit, with the launch of a new web-based information portal. Aimed principally at the accountancy profession across the Welsh economy, the portal supports the Welsh Assembly Government’s drive to see sustainability embedded in organisational strategic planning and day-to-day operation.

This new portal will be hosted by the Prince’s Accounting for Sustainability Project and will give each participating body the opportunity to publicise its own work, its events and case studies, thus enabling a cross-sector approach to the issue.

HRH was very complimentary on how accountants had taken on board the sustainability agenda, which he considered a significantly influential development. This is the first opportunity for the accountancy profession in Wales to collaborate and to receive HRH endorsement is a huge boost.

During the next few weeks more information will be released regarding the portal and a launch event planned for the 3 December.