Local authorities in the United Kingdom are required to keep their accounts in accordance with 'proper practices'. This includes, for the purposes of local government legislation, compliance with the terms of the Code prepared by the CIPFA/LASAAC Local Authority Accounting Code Board (CIPFA/LASAAC).

There is a significant backlog in local authorities financial reporting and audit in England and the government are undertaking a number of measures to try to address the issue.  The proposals to the Code are to aid the recovery of local authority reporting and audit as set out by the Department for Levelling Up, Housing and Communities (DLUHC) and other system partners in February 2024.  

CIPFA/LASAAC are proposing short-term England-only changes that will affect the 2023/24 and 2024/25 Codes, as follows:

• an option to simplify measurement of operational property plant and equipment using specified indexation, and
• reduced disclosures for pensions reporting, by aligning that reporting with FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland.

Comments are requested by 28 March 2024.

CIPFA/LASAAC will also be consulting, later in 2024, on measures that will help local authorities in the longer term.  As part of this CIPFA/LASAAC is planning to consult on proposals affecting the Code for 2025/26 which will encompass:

• extending the application of the temporary solution for infrastructure assets beyond 2024/25;
• proposals for the measurement of operational property, plant and equipment which will further explore simplifying requirements; and
• proposals for more proportionate reporting on pensions in local authority financial statements.

The invitation to comment and the exposure draft containing proposed changes can be found within the press release on the CIPFA website.