Agenda item

(Report of the Head of Finance & Procurement – Mr Anthony Thomas)

Mr Anthony Thomas (Head of Finance and Procurement) provided the committee with a report on the CIPFA Financial Management Code and he explained the key points in more detail. 

Mr Thomas advised that this code had actually been conceived pre-Covid and the drivers around it had been what had happened at Northamptonshire City Council.  It was meant to help provide long term sustainability for local governments by setting out some principles and standards.  (Mr Thomas said he felt it would be applicable to every single sector not just local authorities).  He explained that 2020/21 was a shadow year for these principles to be trialled and then it was envisaged in 2021/22 it would go live.  He said after having visited each area of the code, he felt LDC was compliant with the majority of the code but there were a few minor things we needed to action i.e. to continue to develop the approach to budget consultation in line with the new engagement strategy.

Mr Thomas said that the new service and financial planning process to provide a more robust MTFS had been implemented in 2020/21, and a lessons learnt exercise would be undertaken to see what could be improved for future years.  He said he had built a 25-year revenue model as a consequence, which he would like to develop and build in more on the capital element so that the nature of the transactions were also listed.  It was queried if it was realistic to have a 25-year revenue model and Mr Thomas said he felt it was beneficial as it would paint a picture and, he believed, could identify funding gap trends and enable financial planning for projects over a longer cycle in terms of assessing financial stability.

Engagement with key stakeholders was highlighted and it was hoped, with the help of the new Communications Manager, engagement could be improved upon and we could notify people how we spend their money.  Mr Thomas said, with regards to financial stability, we currently do two separate reports: financial and non-financial, and these reports could be integrated.

The balance sheet risks were reviewed, and where it was recognised that four risks had been identified, it was questioned why the pension risks were not included.  Mr Thomas explained that local authority deficits were statutorily mitigated on the balance sheet through an unusable reserve and to undertake a projection the Actuary would need to be involved in addition to the assessment at the end of the financial year.

RESOLVED:- The Report was reviewed and it was noted that:-

·       The publication of the Financial Management Code and the requirement for it was to be applied from 1 April 2020;

·       That the first year, 2020/21, is a shadow year where Local Authorities are able to demonstrate that they are working towards full implementation which, for the first full year of compliance, would be 2021/22;

·       That an initial assessment had been carried out at Appendix A of the council’s assessed level of compliance compared to the standards contained in the Financial Management Code.