May 2020

CIPFA Bulletin 05 - Closure of the 2019/20 Financial Statements

The 2019/20 Year-end Bulletin has been published and is available to download on the CIPFA website.

Included in the bulletin are many issues that have been raised with CIPFA and FAN directly over recent weeks, including Sargeant Judgements, Going Concern, Covid-19 grants, impact of Covid-19 on asset measurement and impairment, and accounting standards issued but not yet adopted. There are also appendice covering IFRS 16 and a useful checklist of potential COVID-19 issues for narrative reporting.

CIPFA Bulletin 04 Treasury and Capital Management Update

CIPFA’s Treasury and Capital Management Panel have also issued CIPFA Bulletin 04 with general guidance to complement the Prudential and Treasury Management Codes and also guidance in response to challenges raised by COVID-19.

Whole of Government Accounts Submission Dates update

HM Treasury have extended the timetable for Whole of Government Accounts 2019/20 English local authority submissions (via OSCAR II) to - cycle 1 deadline 30 September, cycle 2 deadline 4 December. The Scottish Government website advises that local authorities in Scotland should use the same WGA guidance as England but for material to be sent to WGA_mailbox@gov.scot in place of the LG_returns email address.

Local government finance circular 8/2020: COVID-19 grant funding schemes (as amended)

This circular contains the amended guidance for grant funding schemes: small business grant fund and retail, hospitality and leisure grant fund guidance. This circular supersedes circular 5/2020.

Local government finance circular 9/2020: COVID-19 grant funding scheme phase 2

This circular contains the guidance for phase 2 of the grant funding schemes: small business grant fund and retail, hospitality and leisure grant fund guidance. This is an annex to circular 8/2020.

Local government finance circular 10/2020: COVID-19 local authority accounts 2019-20

This circular sets out the reduction in the reporting burden for the management commentary for 2019-20 and other non-statutory advice.

Local Government Accounting Conference - COVID-19 and the impact on local authority financial reporting - 23 June, Webinar

This year’s June local government accounting technical update for England, Scotland and Wales is being delivered by Webinar in light of current circumstances, hopefully also combatting any geographical barriers. This Local Authority Accounting Conference is the key event for practitioners to find out about the very latest developments and issues for local government financial reporting both now and in future years. This year’s conference will specifically focus on the impact of COVID-19 and what this will mean for accounting, financial reporting and auditing going forward.

Benefits of attending

• Hear the latest updates on proposed changes to the Local Authority Accounting Code
• Understand the key accounting issues created by COVID-19 that will impact on financial reporting, including non-current asset valuations and pensions
• Consider the impact on your 2019/20 and 2020/21 Annual Governance Statements and action plans
• Explore the Code requirements for local authority accounting for the myriad of grant schemes announced by the UK parliament (including the devolved administrations) in response to the crisis
• Update on the latest position on IFRS 16 implementation
• Hear from the auditors on their expectations for the 2019/20 accounts and the reasons for their approach.

The conference will be of interest to all finance professionals working in local authorities and other bodies reporting under the CIPFA/LASAAC Local Authority Accounting Code of Practice, plus those who supply services to the sector. The pricing for these webinars is £145 plus VAT for FAN/WFAN/SFAN/PFAN subscribers, and £195 plus VAT for non-subscribers.

Prepaid places are not eligible for these conferences as they fall outside of the network service plan.

2020/21 Code

Normally the Accounting Code of Practice is published on 1 April in the financial year to which it applies. However, because the public sector has deferred the application of IFRS 16 Leases and CIPFA/LASAAC has agreed with that deferral the draft version of the 2020/21 Code (which included implementation provisions for IFRS 16) had to be updated to reflect that deferral.

The FAN team have been closely involved in updating the 2020/21 Code, removing IFRS 16 and restoring the IAS 17-based requirements. The other changes to the 2020/21 Code remain unchanged. Decisions also have to be made about the issue of the reporting requirements for IFRS 16 Leases. The proposed changes will require formal approval, including consideration by CIPFA/LASAAC, FRAB (and will also have to be approved by CIPFA and LASAAAC) before the Code can be published. FAN will provide updates on the anticipated publication date in future alerts and newsletters, but at this stage publication is anticipated in late June or early July.

Audit Scotland – COVID-19: Impact on public audit in Scotland

Scotland’s public services are under exceptional pressure due to COVID-19. This report describes the approach to be taken by Audit Scotland during these circumstances as pragmatic, flexible and consistent. This paper sets out the principles of Audit Scotland’s approach and their financial and performance audit programmes. It also outlines plans for assessing the impact of COVID-19 on public bodies and reviewing the Scottish public sector’s response to the pandemic.

Consequentials – A positive step in right direction says COSLA

On May 15, Leaders decided to distribute the £155 million consequentials using a well-established formula - Grant Aided Expenditure (GAE) + Special Islands Needs Allowance (SINA). This recognises not only the vast range of issues the COVID-19 response presents for Councils, but also the differences in population, geography and deprivation.

The first cost collection exercise estimates a net additional cost of around £95m to Councils for the period March to end June.

Loss of income due to facility closures, fees and charges, etc, has been identified as the most significant cost pressure.

Leaders agreed that COSLA will work on a joint letter for the Chancellor, focused on the impact of loss of income.

Meetings are now planned with SOLACE and Directors of Finance to start discussions on medium to long-term financial strategies that address the needs of Local Government, and this work will underpin the work of COSLA’s Recovery Special Interest Group.

Summer Budget Revision 2020 to 2021

This document provides information to support the ‘Budget (Scotland) Act 2020 (Amendment) Regulations 2020’ – the Summer Budget Revision.

The purpose of the Summer Budget Revision is to amend the Budget (Scotland) Act 2020, which authorises the Scottish Government's spending plans for the financial year 2020-21. This is an additional budget revision, brought forward to set out for Parliament detail of the budget measures taken by Scottish Ministers in response to the COVID-19 emergency.

European Charter of Local Self-Government (Incorporation) Bill introduced

Andy Wightman has introduced the European Charter of Local Self-Government (Incorporation) (Scotland) Bill to the Scottish Parliament. The Bill seeks to incorporate the European Charter of Local Self-Government into Scots law, in an attempt to strengthen the “status and standing” of local government. Along with the Bill , several other documents have also been published, including a Policy Memorandum, Financial Memorandum, Delegated Powers Memorandum, Explanatory Notes and Statements on Legislative Competence for the Bill.

Coronavirus (COVID-19): Business support fund grant statistics

This document contains statistics on the Coronavirus (COVID-19) business support fund grants including the number of awards granted and the value of these awards. These statistics are be updated on a weekly basis.

Coronavirus (COVID-19): state aid - guidance for public authorities

This document sets out the European Commission’s (Commission) general approach on how State aid rules can support measures in Scotland and within EU Member States to address the impacts of COVID-19.

Local Government: COSLA has provided an update to the Local Government & Communities Committee regarding essential work being undertaken by local government in response to COVID-19.

Additional COVID-19 advice and support for local authorities

CIPFA has set-up an online hub for COVID resources.

Essential guidance on all aspects of coronavirus can be found on the

Gov.Scot website.

Follow FAN on Twitter and connect to us on LinkedIn

David, Sandra and Caroline regularly tweet details of relevant news stories, FAN event updates, CIPFA consultation alerts, COVID-19 updates, etc. We encourage subscribers to follow us on Twitter for the latest news, so even if you don’t ‘tweet’ yourself, it’s a great way to keep updated on key issues affecting local authority finance and accounting. Click to find David Sandra and Caroline on Twitter, or search for all our network advisor tweets using the hashtag #cipfanetworks.

We can also be found on LinkedIn and increasingly use social media for additional FAN updates, so if you are on LinkedIn then please feel free to connect to us: David, Sandra and Caroline.

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