Financial resilience ratings ‘counter productive’
0The County Councils Network (CCN) has criticised proposals for a new financial resilience index for councils proposed by CIPFA.
CIPFA is currently consulting on a scheme that would evaluate the financial health of local authorities, possibly through a “traffic light” rating scheme.
But the CCN, in a joint statement with the Association of County Chief Executives, said this could be a blunt instrument that over-simplifies complex issues.
Richard Flinton, ACCE lead adviser for local government finance and chief executive of North Yorkshire County Council, said: “Naming and shaming local authorities, based on a particular dataset, could be counter-productive in the long-term when we should be looking at how, and where extra support to specific local authorities can be provided.
“It’s no bad thing to have these type of discussions, and the ACCE is open to new measures to help improve financial resilience, but we believe alternative proposals could be far more effective.”
Rob Whiteman, CIPFA chief executive, last week told Room151 that the proposed index was partly intended to help prevent a culture of denial, leading to overlooked financial problems.
“The reason that CIPFA is looking at the index is to make sure we have an alternative to speculation that can be dismissed or discounted,” he said.
