CIPFA Thinks - Building financial resilience: inside CIPFA’s assurance reviews

Welcome back to CIPFA Thinks. In this month’s edition, as we move closer towards the Autumn Budget, attention is turning to the government’s plans - and how they will be financed.

While the exact mix of spending cuts and tax changes remains unclear, June’s Spending Review indicated a continued focus on economic growth and public sector productivity. However, local government allocations, including the police and fire settlement for 2026, won’t be confirmed until December.   

Across the sector, sentiment remains cautiously pessimistic. Some authorities may see modest funding increases, but significant financial challenges persist overall. Indeed, responses will vary across the UK. In areas where pressures stem from social care demand or temporary accommodation, flexibility is limited. Yet CIPFA’s experience of working with the most financially challenged authorities offers valuable lessons on what works - and what doesn’t. 

So how can leaders decide what to prioritise, where to focus and how to achieve the greatest impact? 

It is this need for clarity and insight that led CIPFA to produce its latest assurance reviews summary, sharing real-world experiences to help guide financial resilience and informed decision-making across the public sector. 

Commissioned by the Ministry of Housing, Communities and Local Government (MHCLG), CIPFA’s publication draws on 12 financial assurance reviews of councils reliant on Exceptional Financial Support (EFS). These reviews assessed risks and provided tailored recommendations to help councils develop improvement plans, using CIPFA’s well-established, practitioner-led approach in partnership with its advisory team.  

Common challenges uncovered 

• Planning gaps: 83% of councils struggled with underdeveloped transformation or medium-term financial strategies. 
• Capacity and skills shortages: More than three-quarters lacked sufficient finance capability. 
• Savings challenges: Nearly 60% had failed to deliver planned savings, leaving structural gaps in budgets. 
• Critically low reserves: 5 out of 12 councils had almost no financial buffer left. 

In 2025/26, nearly one in ten English councils are reliant on EFS, with allocations totalling £1.3bn. Understanding these common traits is key to helping authorities plan a for a more sustainable future. Importantly, three of the 12 councils reviewed had undergone reorganisation, illustrating that restructuring alone does not guarantee financial sustainability. 

Pathways to recovery 

The positive news is that some councils can turn things around. Our reviews identified three broad journeys: 

• Transitioning towards financial sustainability – some councils used the breathing space to strengthen governance, improve financial monitoring and embed realistic transformation underpinned by practical, gritty, improvements. 
• Moderate financial challenge ahead – councils stabilising finances but still facing risks around reserves, delivery and demand. 
• Continued need for high levels of financial assistance – a smaller group requiring significant EFS due to debt, governance, or structural challenges. 

The common thread among councils making progress is simple: focus on the basics and move at pace. Stronger planning, targeted investment in finance skills, independent audit scrutiny and strategic use of reserves and assets, alongside key policy decisions, make the difference. 

Shared learning for policy and practice  

Even for authorities not reliant on EFS, these lessons apply across local government. While big-ticket items such as SEND, adult social care and temporary accommodation remain fundamental challenges, progress is possible when organisations apply lessons from peer authorities. 

Key insights for finance leaders 

• Capacity is resilience: the councils most in need of rapid improvement often lack the very finance and leadership resources to deliver it. Investing in people and skills is not a luxury - it’s survival. 
• Governance matters: independent voices on audit committees, better financial reporting and stronger scrutiny distinguish councils that stabilise. These messages are echoed by CIPFA’s Better Governance Forum. 
• Reserves and risk must be managed strategically: quick fixes may buy time, but they don’t build resilience. Councils prioritising strong decision-making and proactive risk management are best placed to exit EFS. 

Turning insight into action

CIPFA’s message is clear: EFS cannot be the new normal. Our assurance reviews show that there is a path forward - and every council can learn from those already on the journey. 

• Read the full summary report: Assurance reviews summary
• Read the full press release: CIPFA highlights common council pressures as numbers reliant on EFS hit 10

📅 What’s next in public finance? 

• Procurement Act 2023: progress, pitfalls, practical insights | 28 October 2025 
• Understanding preventative investment: how to map and measure spend | 6 November 2025
• Social care and the benefits system: maximising outcomes and value for money | 18 November 2025
• Public Finance Live Wales | 27 November 2025

🤝 Get involved:

CIPFA Apprenticeship programmes: Levy-funded Level 7 apprenticeships are ending in 2026 for over 21-year-olds. To help you maximise levy funds, we have an additional cohort starting in December 2025. The deadline for applications is 14 November 2025.

Board member opportunities – CIPFA/LASAAC Local Authority Code Board: Help shape the future of local authority financial reporting and influence how international standards are applied in the UK. Apply by 2 November 2025 - send your CV & cover letter to cipfalasaac@cipfa.org.

This newsletter is prepared by the CIPFA Communications team. Subscribe to receive future editions of CIPFA Thinks.