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CIPFA issues temporary S.114 guidance

The Chartered Institute of Public Finance and Accountancy (CIPFA) has modified its guidance for CFOs to allow councils the “time and space to explore alternatives to freezing spending via a S.114 notice”.

S.114 notices are issued to local councils when their spending is “likely to exceed resource”, but the newly-announced temporary modifications would mean that it should “not normally be necessary for S.114 notices to be issued while informal discussions with the government are in progress”.

The institute is now proposing that CFOs should contact ministers “at the earliest possible stage” to advise them of financial concerns and possible S.114 requirements.

In addition, it has also called for CFOs to communicate potential unbalanced budget positions to ministers, as well as provide a potential S.114 scenario report to local council executives and an external auditor.

Rob Whiteman, CIPFA CEO, said: “The challenges posed to local government finance by Covid-19 are likely to deepen as the year progresses. 


“It is essential that local government and its partners in central government respond jointly to this crisis.”

He added: “With the pandemic accelerating demand across all local services, any freezes on spending in any local area could potentially be highly disruptive and not an effective tool at this time. 

“Temporary change to the S.114 notice process creates space to explore other options or financial support that may be available to local authorities, while allowing finance directors to meet their statutory responsibilities.”

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