CIPFA has issued a revised version of the Prudential Code prompting finance officers to pour over the details to find how the document will transform the treasury landscape.
There are big changes. Gone is the controversial “in advance of need” wording to be replaced with a much simpler formula: “Authorities under legislation can borrow and invest for the following purposes: Any functions of the authority under enactment; For prudential financial management.”
The new phrasing will go some way to clarify the controversial area of where local authorities are permitted to invest. But with the addition of new definitions and guidance there is still much detail to process. With that in mind Room151 and Arlingclose are hosting a special webcast on October 6, (10:30am) to explore the new code, as well the Treasury management code, as they go under consultation once more before final documents are published later this yesterday.
Local government finance officer can register here for the event.
Arlingclose’s David Green has written for Room151 on the complexity of managing provisions in prudential and treasury management codes with different documents covering decision making across Northern Ireland, Wales, Scotland and England.
“The governance of local authority treasury management has evolved over many years and, if we were starting from scratch, I doubt anyone would design it the way it is today,” Green writes.
At the recent Room151 treasury conference, LATIF, Martin Easton, former treasury chief at Birmingham City Council and the main author behind CIPFA’s new financial code, told delegates the new prudential code aimed to address three categories of money management: treasury investment, investment for services and investment for commercial purposes.
“Authorities will be asked to distinguish those three categories more carefully in future,” said Easton, “and report in those three categories in strategies.”
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