Grant Thornton UK and CIPFA have developed a new Financial Foresight model to help UK local authorities understand and test their long-term financial sustainability. Building on Grant Thornton and CIPFA’s successful partnership on the CFO Insights platform, now licensed to over 100 councils, Financial Foresight provides councils with a model that can project costs and income forward to develop a robust medium and longer-term baseline financial forecast.
In addition to demand, income, expenditure, reserve and borrowing level projections, Financial Foresight can benchmark spend between authorities, and apply socio-economic and service outcomes to understand the nature and effectiveness of spend.
Financial Foresight provides the functionality to test and appraise a range of financial strategies and scenarios, to support in multi-service strategy development. The model is supported by a Financial Strategy Accelerator workshop, led by Grant Thornton’s local government specialists and data modelling teams that can be used to independently facilitate a transparent discussion with a council’s senior leadership team on longer term financial planning.
A report based on the model found that:
- one in three (36%) councils in England are at risk of financial failure in the next 10 years, with one in five (17%) at risk of financial failure by 2021
- in 66% of local authorities, spending on services is outstripping income
- based on current per capita expenditure, population growth alone could increase the costs of delivering demand-led services by £1.6 billion over the next decade.
