The Chartered Institute of Public Finance & Accountancy (CIPFA is consulting on plans to launch an index to provide a meaningful measure of local authority financial resilience to reassure to councils who are financially stable and prompt challenge where it may be needed
The index, based on publicly available information, will provide an assessment of the relative financial health of each English council.
Accountancy Daily reports that it will use a range of indicators, including the rate of depletion of resources, level of resources generally, demographic and social services pressures and level of borrowing.
Rob Whiteman, chief executive of CIPFA, said the decision to create the index was a response to the ‘unprecedented’ financial challenges facing local councils in recent years that are likely to remain well into the next decade.
‘Despite the financial strain, councils have been able to deliver core services and manage their balance sheets more actively than other parts of the public sector. But, unfortunately, financial management capabilities and sharing good practice have at times been hollowed out by the repeated need to cut budgets.
Read more on the topic here.