Revenue-boosting costs set to increase council borrowing
UK councils are set to need more money between now and 2019 due to an increase in borrowing to fund infrastructure projects, according to ratings agency Moody’s. Jeanne Harrison, a Moody’s vice president, senior analyst and co-author of the report, said: “UK local governments are expected to have a funding requirement of around £4.6bn in 2017, slightly higher than last year, and increasing annually by £1bn in 2018 and 2019.”
Newham delays predicted transformation savings
London Borough of Newham has pushed back £2m of savings expected from its transformation programme. The programme is due to save £47.9m over the next four years through a review of the council’s operating model. A council report this week said: “Inevitably…in a programme of this scale there are certain areas which have associated risks to delivery both in timing and quantum. Due to the sheer complexity and scale of what the transformation programme is trying to achieve, there are risks attached with the programme being able to deliver fully against its target. Therefore, an adjustment of c£2m has been made to recognise potential non-delivery of savings/income shortfall for 2018/19.”
Residents’ audit launched to scrutinise Lambeth
A group of residents and financial experts has raised concerns about financial management at London Borough of Lambeth. The group this week launched Lambeth People’s Audit, examining the authority’s 2015/16 accounts. It raised worries over the accounting for contractor payments, housing repairs, housing sales receipts, competitive tendering rules and redundancy costs. The group used powers introduced under the Local Audit and Accountability Act 2014 to scrutinise spending.
Orkney oil fund in 15.6% value jump
The value of Orkney Islands Council’s strategic reserve fund rose 15.6% to £207.2m during 2016/17. The fund was originally established to provide a dividend from proceeds of the offshore oil drilling industry. The aim of the fund managers is to return an annual surplus to help pay for services.
Newcastle set to move parks to charitable trust
Responsibility for Newcastle’s parks and green space is to be transferred by the city’s council to a charitable trust. The deal would save the Newcastle City Council £110m over 125 years, according to council documents, although the trust would need £9.7m to cover the first ten years. A similar arrangement already exists in Milton Keynes. The council’s cabinet member for culture and communities, Cllr Kim McGuinness, said: “Although the parks and allotments would be transferred into a Trust, we can reassure people that the council wouldn’t be walking away or selling off the city’s parks as they would still be in public ownership.”
CIPFA updates ethics code
The Chartered Institute of Public Finance and Accountancy (CIPFA) has launched an updated Standard of Professional Practice. Margaret Pratt said: “Public servants are duty bound to ensure their organisation remains financially viable, but ethics should never be undermined to achieve that end. Indeed, ethics should never be viewed as an added bonus, but should be at the heart of all decision making in public services. To ensure that, CIPFA has developed standards to help guide financial managers when facing ethical dilemmas.”