CIPFA launches local government Financial Resilience Index

The Chartered Institute of Public Finance and Accountancy has released an online tool showing high levels of financial resilience across local authorities in England.

The Resilience Index is a data tool that has been in development throughout this year and measures councils’ resilience against nine key indicators and aims to support their financial decision making. Indicators used in the Index include levels of reserves, external debt, ratios of income and expenditure, Ofsted judgements and auditors’ value for money assessments.

The measures are intended to provide a rounded picture of an authority’s resilience to financial shocks. Against CIPFA’s indicators, the majority of councils are not showing signs of stress. However, there is a tail of 10 per cent of councils, where there are some signs of potential risk to their financial stability.

Rob Whiteman, CIPFA CEO, said: “I am proud to be able to launch the Resilience Index today, following a year of collaboration with the sector. CIPFA has been working in partnership with people who live and breathe financial management to design a product that adds value and supports constructive dialogue around the spending of taxpayers’ money. Tools like the Resilience Index will help to ensure the sector is held to collective and robust standards of governance and financial management.”