Adult care costs, Mental health spending, Redundancy payments…

Written on:October 30, 2014
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Adult social care faces funding gap
Adult social care spending faces a black hole of £4.3bn by 2020, according to new figures released by the Local Government Association and Association of Directors of Adult Social Services. The new data showed that over the past year, councils were forced to divert £900m of funding from other budgets to maintain current levels of spending. LGA chairman David Sparks said: “The Government should not be knowingly backing councils into a corner where they have to make impossible decisions about cutting other important services just to continue to manage caring and supporting our most vulnerable.”

Councils “skimp on mental health spending”
Some councils are not planning any spending on mental health this year, according to a freedom of information request by charity Mind. The mental health body said that councils are spending much more on preventing physical health problems each year. It argued that mental health problems cost the country an estimated £100 billion each year through lost working days, benefits, lost tax revenue and the cost of treatment, and account for 23 per cent of the total burden of disease in the UK

Plans to recoup redundancy payments published
The government has published legislative plans – outlined in the Budget – on how it will claw back some or all of redundancy payments from public sector workers earning over £100,000 if they take a new job in the same part of the public sector within less than a year. Both cash and pension top ups will be recoverable – except for those reformed public service pension schemes the right to a full pension is set out in scheme rules. Priti Patel, exchequer secretary to the Treasury, said: “It’s not fair that hardworking taxpayers were forking out for redundancy payments for people who then went straight back in to another public sector job.”

Funding structures “prevent housebuilding”
Local authority funding mechanisms are stymieing housing development, according to the Institute for Government. A study it released this week found that new development often implies additional costs through infrastructure and public services, while increases in revenues are more limited. “Local authorities themselves have few fiscal incentives to allow more development,” the report noted.

CIPFA to explore Islamic funding for councils
The Chartered Institute of Public Finance and Accountancy, is to examine how councils and other public bodies could make use of Islamic finance as a borrowing source. The move comes after the body held a round table event to explore the issue with local government finance officers, the banking sector and specialists in Islamic finance. CIPFA has now committed to explore products which could be tailored to meet the needs of local authorities and other public bodies.

Labour promises limited lifting of HRA caps
Councils presenting a strong business case and investment plan would see the cap on their borrowing for housebuilding lifted under any future Labour government. Shadow local government ministers have written to councils endorsing the move which was outlined in the party’s recent review of housing by Sir Michael Lyons. Councils would also be given powers to fine housebuilders which did not build out planning permissions.

Liverpool joint venture criticised over accounting
Auditors have raised concerns over record keeping and accounting at Liverpool City Council’s joint venture with BT to provide ICT and other services. A report by KPMG said that they faced “significant limitations” on information available to them. Liverpool City Council has agreed plans to scrap the deal to save around £10m a year.

Council company wins homes business
Norse Commercial Services and Great Yarmouth Borough Council have formed a new Joint Venture Company to manage and maintain the council’s community housing stock. The company,  a subsidiary of Norse Group Limited which is a company controlled by Norfolk County Council, will be responsible for asset management and building maintenance on Great Yarmouth’s 6,000 council homes. The 10-year agreement is initially worth around £6 million a year, and is expected to rise over the coming years.

Alcentra wins £80m Essex property mandate
Essex Pension Fund has appointed global asset management firm Alcentra as a manager for an illiquid real estate debt strategy. Alcentra, a subsidiary of Bank of New York Mellon will invest between £80m and £100m  - around 2% of the fund’s overall assets – in a pooled illiquid debt fund. The long-only debt portfolio will include direct corporate lending, real estate lending and distressed debt.

Fed ends QE3 as markets price in rate rise in H2 2015

Written on:October 30, 2014

As was nearly universally expected and as we predicted, the FOMC ended its QE3 asset purchase programme by “tapering” its purchases by a final $15bn. In total, the Fed bought just over $1.6 trillion in net new MBS ($823bn) and Treasury ($790bn) debt during QE3, having begun buying net new MBS in September 2012, adding net new Treasury purchases in January 2013. The QE3 programme compares in size to the…

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Income on the rise in LGPS as value hits £178bn

Written on:October 30, 2014

The market value of Local Government Pension Scheme funds in England at the end of 2013/14 rose by 6.3% from the previous year to reach £178bn. Figures released by the Department for Communities and Local Government this week demonstrated a rise of 83% on March 2009. Overall income during 2013-14 was £11.6 billion, an increase of £534 million (4.8%) when compared to 2012-13. The biggest contributor to the rise in…

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Commission proposes tax sharing for ‘self-sufficient’ local government

Written on:October 30, 2014

Councils could end their reliance on central government funding by sharing their tax income between themselves, according to the interim report of the Independent Commission on Local Government Finance. The report, released today, revealed the commission’s initial findings, based on responses from councils and other interested parties. It said that data from the Local Government Association indicates that by 2018/19 local government could become self-sufficient if it retained and redistributed…

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MEPs and practitioners to thrash out MMF proposals

Written on:October 30, 2014

European politicians are to hold a round table with industry experts in an attempt to resolve proposals for the future of money market funds. Earlier this month, the European Parliament’s economic and monetary affairs committee held its first debate on the issue since European elections in May. UK Labour MEP Neena Gill, the new committee’s rapporteur, suggested a round table to discuss the issue of a proposed buffer on MMFs,…

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Capita partners with PSLive to bolster treasury offering

Written on:October 29, 2014

Treasury advisor Capita Asset Services has agreed a strategic partnership with Public Sector Live (PSL), which will see the promotion of the latter’s TreasuryLive risk management software. Capita will combine the tool, currently used by around 25 local authorities, into the advice it offers on treasury management strategy. The cloud-based platform, which has been endorsed by CIPFA’s Treasury Management Network, allows councils to record all of their deals and link…

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Funding devolution, Record fraud, Crowdsourced finance, Liverpool take back ICT…

Written on:October 23, 2014

LGA in plea for funding devolution The Local Government Association has called on chancellor George Osborne to devolve more funding freedoms to local authorities in his Autumn Statement. The association called on Osborne to “make place based finance the default method of funding and delivering local public services, empowering local partners to work towards shared outcomes”. It also said that all funding for local growth, regeneration, skills and employment should…

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Councils explore collective model for new homes

Written on:October 23, 2014

The Local Government Association is consulting with councils about a new collective investment model which could unleash a large scale affordable housebuilding programme free from public subsidy. The association has written to local government chief executives to gauge appetite for a plan which would see councils band together to gain institutional investment for thousands of new homes. The proposals are aimed at reducing the costs of entry to gain such…

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Bournemouth’s Wilkinson resigns following suspension

Written on:October 23, 2014

Bournemouth Borough Council’s executive director for finance has resigned, two weeks after it was announced that she had been suspended following complaints about her behaviour. Liz Wilkinson had been driving the authority’s creation of a community finance initiative (CFI) to lend to small businesses and first time buyers. She joined Bournemouth after leaving her previous role as head of financial services and section 151 officer at neighbouring Borough of Poole Council…

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Leeds sells off £93m of property portfolio

Written on:October 23, 2014

Leeds City Council has approved a plan to dispose of £93m of property assets from its portfolio. Earlier this week, the council’s executive board voted to progress the asset management plan, which aims to save £4.5m in revenue costs between 2014 and 2017. The council says that it has already disposed of £27m worth of assets, which has resulted in £6.5m of revenue savings, and says another £4.5m will come…

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