Latest news with #CharteredInstituteofPublicFinanceandAccountancy
Bloomberg
7 days ago
- Business
- Bloomberg
English Councils Struggle With Rising Cost of Special Needs Kids
Ballooning spending on children with special educational needs and disabilities is putting England's already stretched local councils under even more financial strain, adding urgency to Prime Minister Keir Starmer's plans to reform the system. Across the country, cumulative overspends on the so-called SEND program were forecast to double to £8 billion ($10.6 billion) by 2027 from about £4 billion in March, according to a report earlier this year by the Chartered Institute of Public Finance and Accountancy. At the root of the increase are so-called education, health and care plans — legal documents known as EHCPs introduced in 2014 that set out the tailored support councils must provide to individual pupils to cater for their needs.
BBC News
16-07-2025
- Business
- BBC News
Political row erupts over Bedford Borough Council's finances
A council is facing a claim that it is effectively bankrupt following a review of its finances.A study of the financial position of Bedford Borough Council by the Chartered Institute of Public Finance and Accountancy (CIPFA) has highlighted a number of leader Henry Vann, a Liberal Democrat, said he had been "told that Bedford Borough Council is in effect bankrupt".But Conservative group leader Graeme Coombes said "Bedford Council is not bankrupt" and it was "a staggering attempt by... Vann to mislead the public". The CIPFA review found that the council needed "a robust, credible strategy" to secure its longer-term financial future and that it needed to be "prepared to act boldly and make 'politically unattractive' decisions", reports the Local Democracy Reporting report highlighted a projected overspend for the current financial year that could deplete the authority's entire general reserve, and it added that "we believe the council is already in S114 territory".An S114 means a council's forecast spending exceeds its income, and it cannot meet its financial obligations without drastic measures. It is a formal notice that freezes all non-essential spending.A spokesperson for the authority said it had "commissioned CIPFA to undertake a review of the council's financial resilience and financial management".They added that it "reflects a shared commitment from the corporate leadership team and cabinet to ensure the long-term sustainability of the organisation".The council said the report confirmed it was facing financial challenges, which were "driven by high spending on temporary accommodation and growing pressures in children's services and adult social care".An improvement plan is being prepared to "return the council to a sustainable position". The authority is under no overall control but its cabinet is made up of nine Conservative members – including the mayor, Tom Wootton – and an report has sparked a political row with the Lib Dems, who are the largest opposition said: "It is deeply sad that, despite our repeated warnings, we now see the Conservative mayor's decisions leading us to this disastrous point."He added that he "urgently called on the mayor to produce a recovery plan" and "cancel wasteful spending that does not protect residents".However, Coombes said: "The CIPFA report confirmed the root causes of Bedford's financial situation are not just recent, and stem from over a decade of financial recklessness and poor governance by the previous mayor, in whose cabinet Vann served."He added that "Vann's fingerprints are all over the current financial predicament and it's Bedford residents who are paying the price". Follow Beds, Herts and Bucks news on BBC Sounds, Facebook, Instagram and X.
Yahoo
23-06-2025
- Business
- Yahoo
CIPFA welcomes Fair Funding Review 2.0
The Chartered Institute of Public Finance and Accountancy (CIPFA) has responded to the Ministry of Housing, Communities and Local Government's (MHCLG) consultation on the Fair Funding Review 2.0 and Council Tax Reform. It has expressed cautious optimism about the government's commitment to reforming local government finance. CIPFA director of Public Financial Management Iain Murray said: "We welcome the Government's recognition that local government finance needs reform. The commitment to address long-standing disparities in funding allocations and simplify the complex patchwork of grants is a positive step toward greater fairness and transparency.' Murray emphasised on the need for careful implementation and 'robust data' to support the transition. The institute has acknowledged the government's efforts but warns that structural challenges persist, particularly in the allocation and redistribution of funds. The proposed reforms, including a return to a multi-year settlement and the consolidation of funding pots, have been well-received by finance professionals for providing a clearer basis for planning and accountability. However, CIPFA has raised concerns that the government has yet to address fundamental pressures, such as the statutory override for SEND (special educational needs and disabilities) high-need deficits, which has been extended to 2028 without serving its intended purpose of facilitating reform. Murray added: "Without urgent solutions to both existing and future SEND deficits, those councils grappling with unsustainable high needs costs and rapidly growing cumulative deficits may, at best, be forced to make further reductions in essential services, and at worst, risk declaring themselves effectively bankrupt." Recently, CIPFA has issued a warning in response to the Public Accounts Committee (PAC) report on local government financial sustainability., which indicates a looming financial crisis for councils across the UK. "CIPFA welcomes Fair Funding Review 2.0" was originally created and published by The Accountant, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Yahoo
12-06-2025
- Business
- Yahoo
UK Spending Review 2025 delivers 'mixed bag'
Owen Mapley, CEO of the Chartered Institute of Public Finance and Accountancy (CIPFA), has called the Spending Review 2025 a 'mixed bag'. 'Much to welcome, but long-term sustainability remains unresolved for many public services,' Mapley said in response to the UK government's Spending Review announced on 11 June 2025. Mapley noted that while additional funding for the NHS and defence was confirmed, many unprotected areas received little relief. 'For frontline services, significant pressures and concerns around long-term stability are likely to endure,' he said. Local government was highlighted as a sector set to benefit from a longer-term funding settlement. However, Mapley expressed reservations, stating: 'Serious concerns remain about the sector's overall sustainability.' He said that key challenges including funding gap for social care remain unaddressed. On the NHS, Mapley acknowledged the positive impact of increased investment but cautioned that 'the demands on these resources will be immense.' He emphasised that delivering transformation through technology and modernisation would be crucial for the NHS to achieve sustainability and support the forthcoming ten-year health plan. Mapley concluded by noting the complexity of the review, saying, 'Crunching the Spending Review numbers, and considering the multiple documents released alongside the review, may reveal a clearer picture. CIPFA looks forward to considering the details over the coming days and weeks.' Chancellor Rachel Reeves announced an additional £29bn per year for the NHS in England, alongside increased funding for defence and housing, as part of the government's spending plans extending to the end of the decade. Reeves also pledged further investment in artificial intelligence and transport projects. However, the review brought tighter budgets for some departments, with the Foreign Office and environment department facing constraints on day-to-day spending. "UK Spending Review 2025 delivers 'mixed bag'" was originally created and published by The Accountant, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
The Guardian
30-03-2025
- Business
- The Guardian
Nearly 20 councils in England ‘at risk of insolvency' due to Send costs
Nearly 20 councils have warned publicly that they are at risk of insolvency because of multibillion pound debts caused by years of overspends on special educational needs support, the Guardian can reveal. Overspending on special educational needs and disability (Send) services in England is forecast to grow by nearly £2bn over the next 12 months, a Guardian investigation shows. Councils will see mounting special educational needs and disabilities (Send) deficits rise by 54% on average, with some anticipating accrued debts to increase by millions of pounds every month as they struggle to cope with soaring demand. The deficits – currently totalling £3.4bn – will hit £5.2bn in 12 months' time. At least 18 councils have warned explictly the debts put them at risk of insolvency unless the government intervenes, with council estimates suggesting even more could go bust. 'The deficits are pushing councils all over England to the financial brink. The clock is ticking, and councils are being left in limbo with significant uncertainty over the future of services,' said William Burns, social care policy adviser for the Chartered Institute of Public Finance and Accountancy (Cipfa). Mass defaults on Send deficits would cause chaos and damage other local services, said Cipfa, because councils which declare effective bankruptcy would be forced to drastically rein in spending in all areas, not just local schools. It estimates as many as 75 councils are at risk. The spiralling debts were kept off council books by Tory ministers using an accounting fix called a 'statutory override' but this ends on 31 March 2026, when the debt returns to town hall balance sheets. Ministers must now decide whether to clear the debt, or extend the override until the deficits can be cleared safely. The Send deficit ballooned under the last government, triggered by rapid increases in the cost of meeting education and health care plans (EHCPs) which give children the legal right to school support for conditions such as autism, and speech and language difficulty. In 2015, 240,000 ECHPs were in place in England, more than doubling to 576,000 in 2024, according to Department for Education (DfE) statistics. Insufficient special needs capacity in state schools, and the high costs of Send placements in private specialist schools, have been driving overspends. A government insider said: 'Those [council] forecasts can only have been based on the failing Tory system that we will change. Tackling the chaos that the Tories left in our Send system is a major priority for [the education secretary] Bridget Phillipson, so we can give every child the opportunity to get a brilliant education.' A Guardian investigation shows at least 101 English councils – over two-thirds of the total – spent more than their allocated Send budget during the past year, with 18 councils breaching their annual allocations by over £30m. Nearly nine out of 10 English upper-tier councils – of the 131 which responded in full to the FoI – will have an accumulated deficit on their high needs budgets by the end of next March, with one-in-four (32 out of the 131 who responded in full) now predicting debts of more than £50m and 15 debts of £100m or more. Leeds city council, which covers chancellor Rachel Reeves's Leeds West and Pudsey constituency, has forecast its accumulated Send deficit will soar from £17.5m to £50m by the end of the next financial year, and warned the increase will put it at 'serious financial risk'. Hampshire county council, which has England's largest forecast deficit at £312m, is projecting its debt to rise by £111m over the next year. In its budget reports, the council said that if the override was removed and the debt became a part of the organisation's deficit, 'a section 114 notice would become inevitable'. Middlesbrough, one of England's most deprived authorities, said its forecast Send deficit will rise by more than quarter to £26m over the next 12 months. In council papers last month, it called this 'a critical risk to the council's financial viability, given that it will wipe out the council's general fund reserves.' The average forecast accumulated deficit across the councils covered by the analysis is £40m by the end of March 2026, with 112 forecasting their accumulated high needs deficit will worsen over the next 12 months. A DfE spokesperson said: 'The evidence is clear that the Send system has been on its knees for years – with too many children not having their needs met and parents forced to fight for support. 'It will take time, but as part of our Plan for Change we are thinking differently about what the Send system should look like, to spread opportunity, restore the confidence of families up and down the country and deliver the improvement they are crying out for.'
