Grant Thornton
3 Experts
4 Contributions by Grant Thornton Experts
PRACTICE NOTES
What is capital finance and why does it matter?
Unlike revenue finance, where day-to-day spending must be met from current income, capital expenditure can be financed through borrowing or capital receipts, with the related costs then spread over the period during which the benefits are expected to arise. The current arrangements, commonly known as the Prudential Framework for England and Wales, are set out in Part 1 of the Local Government Act 2003 (LGA 2003). This framework promotes investment in the capital assets local government needs to improve services, and it rests on accounting principles alongside professional judgement and self-regulation. It enables local authorities (LAs) to raise finance for capital projects without central consent, provided they can afford to service the debt without additional government support. Between 2010 and 2022, low interest rates encouraged LAs to borrow from the Public Works Loan Board (PWLB) and other
Local Government
PRACTICE NOTES
This Practice Note sets out the requirements and flags the principal matters concerning the financial statements and reporting for LAs.
What is financial accounting in brief?
Local authorities (LAs) are highly complex organisations with intricate and numerous transactions that must be properly accounted for. In 2009, HM Government chose to implement International Financial Reporting Standards (IFRS), the framework used by FTSE 350 companies and widely regarded as the ‘gold standard’. These standards are extensive, detailed and highly rules‑driven, running to well over 2,000 pages in total. In addition, LAs must also closely follow the Chartered Institute of Public Finance and Accountancy (CIPFA) Accounting Code of Practice, updated on an annual basis each year. The Code adopts IFRS as specified, then makes changes by introducing statutory overrides and other adjustments so that the effect of IFRS accounting is not charged to the General Fund and,
Local Government
PRACTICE NOTES
What is ?
Local authorities (LAs), like the wider public sector, are required to run their activities within set budgets. With spending limits broadly predetermined, they should ensure actual expenditure closely aligns with the budget. If unforeseen pressures arise that risk overspending, or, in rare cases, unlawful budget setting or unremedied General Fund deficits, LAs and their statutory proper officers are duty-bound to intervene and restore compliance. Setting the budget and putting in place robust monitoring is among the most critical financial disciplines for LAs, underpinning sound stewardship of public funds. With firm controls, the likelihood of material over or underspends should be low. Where controls are weaker, significant variances can emerge. Financial management sits at the heart of an LA’s corporate governance; it is a core responsibility for every manager, not merely a task for accountants. Accordingly, senior management and leading members across the
Local Government
PRECEDENTS
Introduction and instructions
Brief outline of the expert’s background and experience.
Instructions
Who instructed: lay client or legal advisers.
Where instructed by legal advisers, identify the ultimate client.
Detailed directions sufficient for the tribunal to grasp the scope.
Documents relied upon: list or summarised categories.
Circulation limits and reliance permissions.
Disclosures of interest, including links to parties or tribunal.
Any scope limitations (if applicable).
Executive summary
Concise overview of principal conclusions.
Background to the case
Outline the history and context of the matter.
Main body of the report
Set out the detailed analysis, methodology, and evidence.
Conclusion OR Summary
Summarise the expert’s opinions and key reasoning.
Expert's declaration
Insert the required statements and
Arbitration
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