CIPFA wants ‘fundamental’ shift in local government reporting
17 Oct 2019
CIPFA has signalled its intention to drive a fundamental shift in local government financial reporting in the UK, with a consultation on a new framework specifically design for the sector
17 Oct 2019
Under current reporting regulations all public bodies are required to comply with IFRSs, but CIPFA has released a set of discussion papers in partnership with the Local Authority (Scotland) Accounts Advisory Committee (LASAAC) exploring how financial reporting could be improved, and whether accounts can be made scalable through a differential reporting framework.
This would mean that public bodies could provide annual accounts which are appropriate to the size and nature of their organisation.
Don Peebles, CIPFA head of policy and technical said: ‘The changes CIPFA/LASAAC are putting up for discussion could revolutionise and streamline financial reporting for many authorities, allowing them to deliver transparent, user-friendly and more efficient accounts.’
The papers also explore how reporting could be done differently for issues including pension liabilities, capital assets and group accounts. Feedback is invited by 4 November.
Separately, CIPFA has also launched its financial management (FM) code, to drive improvement in financial management for councils across the UK. The new code is its first in almost 15 years, and is intended to bring together many areas of local government financial management into one place.
Rob Whiteman, CIPFA CEO, said: ‘Our ambition is to embed good financial management as an organisational responsibility. It is vital that, as a sector, we break down historically siloed ways of working and move towards a sense of collective responsibility when it comes to finance.’
The FM code is based on a set of standards and principles, including organisational leadership, transparency, assurance and sustainability. It comes into effect from April 2020, CIPFA says in recognition of the pressures facing local authorities, 2021/22 will be the first full compliance year for the code. This allows authorities a shadow year to work towards full implementation.
CIPFA/ LASAAC discussion papers are here.
CIPFA Financial Management Code is here.
By Pat Sweet