An online tool released today by CIPFA (Chartered Institute of Public Finance and Accountancy) shows high levels of financial resilience across local authorities in England.
The Resilience Index is a data tool that has been in development throughout this year. It measures councils’ resilience against nine key indicators and aims to support their financial decision making.
Rob Whiteman, CIPFA CEO, said:
“I am proud to be able to launch the Resilience Index today, following a year of collaboration with the sector. CIPFA has been working in partnership with people who live and breathe financial management to design a product that adds value and supports constructive dialogue around the spending of taxpayers’ money.
“Tools like the Resilience Index will help to ensure the sector is held to collective and robust standards of governance and financial management.”
Indicators used in the Index include levels of reserves, external debt, ratios of income and expenditure, Ofsted judgements and auditors’ value for money assessments.
These measures are intended to provide a rounded picture of an authority’s resilience to financial shocks.
Against CIPFA’s indicators, the majority of councils are not showing signs of stress. However, there is a tail of 10% of councils, where there are some signs of potential risk to their financial stability.
Carol Culley, Deputy Chief Executive and City Treasurer, Manchester City Council, said:
“We hope that the release of the Financial Resilience Index today will support local authorities in conducting their long term resilience assessments.
“However, it’s important to remember that the Index forms only one part of that judgement. Local context must also being taken into account when forming an overall picture of resilience.”
The Resilience Index represents one of a range of tools CIPFA provides to support public sector finance professionals, including the Financial Management Code and personalised organisational resilience advice.
ENDS
For further information please contact the CIPFA press office on T: 020 7543 5737 or E:ashleigh.moore@cipfa.org
Notes to Editors
- The Resilience Index can be found here.
- A beta version of the tool was shared with local authority finance directors last year: Measured resilience in English authorities.pdf
- The Index is not a predictive model - it is a diagnostic tool for recognising potential signs of financial risk.
- Upper tier authorities are judged against 9 indicators, while authorities without social care responsibility are judged against
About CIPFA
CIPFA, the Chartered Institute of Public Finance and Accountancy, is the professional body for people in public finance. CIPFA shows the way in public finance globally, standing up for sound public financial management and good governance around the world as the leading commentator on managing and accounting for public money.