Brexit uncertainty requires flexible public sector response, says CIPFA

16 Nov 16

CIPFA chief executive Rob Whiteman has called on chancellor Philip Hammond to give public bodies greater flexibility to respond to Brexit and other areas of financial uncertainty.

In a briefing ahead of the Autumn Statement, the institute urged the government to move away from short-term financial fixes and to gain a better understanding of what impact previous spending decisions have had on the quality and outcomes of public services.

In its statement, CIPFA highlighted that much will be riding on the direction of this year’s Autumn Statement, which Hammond has indicated could see a reset of the public finances as part of new fiscal rules.

The institute stated it is concerned about the prospects facing public services, particularly in light of Brexit. Alongside detailed assessments of the impact of leaving the EU on public services, the government should do more to plan for the medium and long term, including strategic investment to stimulate economic growth, as well as preventative spending in areas like health. A fiscal stimulus for investing more in the areas of transport and social housing would also be welcomed.
Whiteman highlighted this had been a year of extraordinary political surprises, both in the UK and abroad, which has led to growing uncertainty and mounting problems for the public sector.

“Public bodies need medium term financial solutions and not an annual sticking plaster,” he stated.

“[They] should be given greater flexibility to use the resources on their balance sheets to support service delivery, including flexibility to borrow to invest.”

The institute also called for a better understanding of government spending at the individual policy level, and is partnering with the Institute for Government to examine government finances beyond top-level departmental spending. Greater use of Whole of Government Accounts would also better inform fiscal decision making.

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