• Home
  • About
  • Subscribe
  • LATIF
  • Conferences
  • Dashboard
  • Edit My Profile
  • Log In
  • Logout
  • Register
  • Edit this post

Room 151

  • 151 BRIEF

    What's New?

  • John Turnbull elected president of the SLT

    May 12, 2022

  • Pension pool identifies biodiversity as a priority

    May 11, 2022

  • TfL latest to face credit-rating downgrade by Moody’s

    May 10, 2022

  • Government proposes ‘fairer, more accurate’ business rates system

    May 10, 2022

  • Queen’s Speech confirms planning reforms

    May 10, 2022

  • 18,000 affordable houses lost through ‘permitted development’

    May 9, 2022

  • Treasury
  • Technical
  • Funding
  • Resources
  • LGPS
  • Development
  • 151 News
  • Blogs
    • David Green
    • Agent 151
    • Dan Bates
    • Richard Harbord
    • Stephen Sheen
    • James Bevan
    • Steve Bishop
    • Cllr John Clancy
    • David Crum
    • Graham Liddell
    • Ian O’Donnell
    • Jackie Shute
  • Interviews
  • Briefs

Medium term financial plans demand a ‘refresh’, despite uncertainty

0
  • by Guest
  • in Resources · Treasury
  • — 14 Sep, 2020

Medium term financial plans demand action.

When it comes to medium term financial planning, Tracy Bingham observes the only thing that is certain is that there’ll be uncertainty. But that’s no reason to avoid preparing.

All local authorities will have by now a good understanding of the significant funding changes currently on the horizon in the form of fair funding and business rates reform. Two and a half years have passed since I last developed my district council’s medium term financial strategy (MTFS). It’s as relevant now as it was then following two deferrals of review; the first, as a result of Brexit and more recently, Covid-19.

Throw into the mix the (still emerging and evolving) impact of the pandemic and it’s easy to put off reviewing the MTFS until there’s more certainty. But when, if indeed ever, will that come?

Many of us now anticipating the outcome of the spending review and forthcoming white paper on devolution. We’re also still reeling from the impact of the pandemic so far. So, how can we plan in the absence of any real certain fiscal policy?

Understand the fiscal landscape, even if it is uncertain

We continue to manage our revenue accounts within an out-of-date funding system, the consequence of which is a business rates system that is years passed its reset sell-by date and a funding formula based on historical data (and which as a consequence is wreaking havoc with funding for social care amongst other issues).
Understanding where your authority is in this context, and how the current out-datedness impacts your funding position, is key to developing a financial strategy that will manage the changes when they do happen.

It’s good to get this understanding from a range of sources including funding advisers, minutes of the review working parties and, of course, central government announcements.

Ultimately, what you assume in your plan is up to you (aside from what’s in black and white from Westminster), and striking a balance between prudent thinking and optimism is something that only you can gauge.

If something’s uncertain, make that clear—decision makers need to know whether they’re making decisions based on hard fact, speculative or well-informed assumptions. Giving those in power the choice of “getting ahead” can be no bad thing. As someone recently said to me: Sometimes it takes hard work to be lucky!

Outcomes

One of the most obvious ways of managing expectations around financial planning is to remind your management and administration that there will never be a perfect financial plan. You know only too well that it’s as accurate as the moment you develop it and will change at any given hour, but other’s often need reminding.

Presenting a range of scenarios for each key issue in isolation is a good way of presenting the potential funding reform outcomes. By keeping the scenarios and sensitivity analysis at high level, you’ll be able to broaden understanding of the issue itself as well as the associated risk of making different assumptions and taking different courses of action.

Don’t put it off

Now, more than ever, section 151 officers need refreshed financial plans to navigate and weather the financial storm created by the pandemic as well as the potential disruption on its way through funding reform.

Uncertainty around the future of fiscal policy is not a reason to leave the plan on the shelf in favour of waiting for more information. If nothing else, by reviewing and updating your plan you will raise awareness and deepen the understanding of your management and councillors of the potential scale, magnitude and range of outcomes. This will help you to formulate your strategies and understand what your members’ no-go areas are for making changes, should that be necessary.

Tracy Bingham is head of finance and section 151 officer at North West Leicestershire District Council.

 

 

Share

You may also like...

  • Impact Awards: Liverpool’s cafe culture and Warrington’s investment in homes 9th Apr, 2021
  • No ‘fire sale’ of treasury assets under new Prudential code 8th Oct, 2021
  • Local authorities need to ‘invest in finance teams’ 27th May, 2021
  • How much MRP is enough? 2nd Mar, 2022

Leave a Reply Cancel reply

You must be logged in to post a comment.

  • Register to become a Room151 user

  • Latest tweets

    Room151 23 hours ago

    To Michael Gove: a modest proposal: Conrad Hall has written an open letter to the levelling up secretary suggesting an unusual (and tongue-in-cheek) proposal to help councils predict next year’s government grant. Dear Secretary of State,[...] dlvr.it/SQ9GpX pic.twitter.com/mSX1xgeL8a

    Room151 1 day ago

    Queen’s Speech: an ambitious plan hampered by omissions: Richard Harbord examines the impact of the government’s legislative proposals on councils, and concludes that local authorities expect and need more from central government. However you view the… dlvr.it/SQ8hmP pic.twitter.com/BsnziyNPIO

    Room151 2 days ago

    Insights and inspiration from LGPS leaders past and present: Four current and former LGPS leaders have recently given powerful and insightful interviews as part of the Fiftyfaces podcast, which showcases inspiring investors and their stories. Hosted by… dlvr.it/SQ53lC pic.twitter.com/IRYMFPxdA2

    Room151 3 days ago

    Rate rise represents ‘fastest increase in borrowing costs in 25 years’: Partner Content: CCLA Investment Management’s Robert Evans analyses the rationale for the Bank of England’s latest rise in the Official Bank Rate and assesses the likely outcome of… dlvr.it/SQ33k3 pic.twitter.com/A81yiS1UgN

    Room151 3 days ago

    The Liability Benchmark, very much unloved at the recent Room151 treasury briefing, receives a much more positive assessment from Jackie Shute. There’s ‘no better tool for treasury portfolio management’, she says. #localgov #finance room151.co.uk/treasury/in-pr…

    Room151 3 days ago

    In praise of the Liability Benchmark: Jackie Shute responds to recent criticisms of the framework used to plan the future borrowing requirements of a local authority. I’m not suggesting that this debate will have the same[...] dlvr.it/SQ2cGf pic.twitter.com/4rqXTpHC9A

    Room151 3 days ago

    Room151 launches survey on IFRS 9 override and MRP impact: Room151 has launched a survey to gauge the sentiment in local government on two important issues: the IFRS 9 statutory override and the consultation on Minimum Revenue Provision (MRP). The[...] dlvr.it/SQ1VT7 pic.twitter.com/ahPEiLoFNC

    Room151 3 days ago

    Calling all #localgov treasurers and #s151 officers. Have your say in our IFRS9 and MRP survey room151.co.uk/treasury/room1…

    Room151 3 days ago

    Our #LGPS #PrivateMarkets conference is six weeks away. Investment officers, their pool PMs and investment committee chairs can find out more here lnkd.in/eEr4Usc8 Speakers including Bola Tobun Damien Pantling James Thelwell James Whidborne and many more... #localgov pic.twitter.com/E4m9BWG5iG

  • Categories

    • 151 News
    • Agent 151
    • Audit
    • Blogs
    • Business rates
    • Chris Buss
    • Cllr John Clancy
    • Council tax
    • Dan Bates
    • David Crum
    • David Green
    • Development
    • Education
    • Forum
    • Funding
    • Governance
    • Graham Liddell
    • Housing
    • Ian O'Donnell
    • Infrastructure
    • Interviews
    • Jackie Shute
    • James Bevan
    • Jobs
    • Levelling up
    • LGPS
    • Mark Finnegan
    • Net Zero
    • Private markets
    • Recent Posts
    • Regulation
    • Resources
    • Responsible investing
    • Richard Harbord
    • Risk management
    • Social care
    • Stephen Fitzgerald
    • Stephen Sheen
    • Steve Bishop
    • Technical
    • Transport
    • Treasury
    • Uncategorized
    • William Bourne
  • Archives

    • 2022
    • 2021
    • 2020
    • 2019
    • 2018
    • 2017
    • 2016
    • 2015
    • 2014
    • 2013
    • 2012
    • 2011
  • Previous story CFO secrets: Revisiting ‘purpose’ helps ensure your finance function is fit for the job
  • Next story Stephen Sheen: The Redmond Review fails to address key issues

© Copyright 2022 Room 151. Typegrid Theme by WPBandit.

0 shares
We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we'll assume that you are happy to receive all cookies from this website.OK