Scenario planning “particularly weak” says Grant Thornton report
0Local government must implement better strategic financial planning, according to Grant Thorton’s latest report on the state of councils’ health, Towards a Tipping Point?
The survey of UK councils found that 91% had good (‘green’ rated) strategic financial planning for 2011-12, compared to 100% for 2010-11. The findings show that while the majority of authorities still have effective processes for regular reviewing of the medium term financial plan, a minority of authorities surveyed had not updated the MTFP and were instead focussing on setting budget for 2012-13.
Scenario planning was found to be particularly weak. Grant Thorton’s statement on the report noted that with uncertainty levels as high as they are, “effective and robust scenario planning is more critical than ever.”
Other areas covered by the survey were financial governance, financial controls and key indicators of financial performance. Councils improved in most areas, particularly in terms of reserves where 92% received a green rating in 2012 compared to 79% for 2011.
Said Guy Clifton, local government advisory lead at Grant Thornton: “The challenges facing the sector remain significant, confidence for the medium-term is understandably generally weaker than a year ago with the majority of the government’s fiscal consolidation plans still to be delivered over the next two and half years.”
