Local authorities could seek out employees from the private sector as they switch to preparing their accounts which follow International Financial Reporting Standards (IFRS). Councils face a deadline of 1 April 2010 by which to switch standards, and CIPFA has laid out a two-year programme to develop and implement a new IFRS-based code of practice for local authority accounting. The timetable will allow councils to prepare for the ‘significant change', and learn from the experience and mistakes of both the private sector and central government, which have already made the transition to the new basis for accounting. A CIPFA spokesman told The MJ it was running as many training courses as possible for those already working within the local government sector to deal with the changes, but added that councils could look to the private sector when recruiting and select candidates who had already experienced going through the transition. ‘It will definitely be desirable on the CV,' he said. Nick Bennett, public sector partner at Scott-Moncrieff and chair of CIPFA and LASAAC, added: ‘This is a challenging but achievable timetable that will ensure local authority financial reporting maintains its current high standards. ‘The 2010 timetable announcement provides certainty for councils, and we look forward to working with all key stakeholders to ensure that IFRS are implemented in the most appropriate way for local authorities across the UK.' Another impact of the transition to IFRS is the re-examination by the Treasury of how PFI assets are accounted for. PFI assets may be shown in the public sector balance sheet, implying that borrowing by the service provider to finance the investment programme would read as local authority debt. The Treasury is developing guidance for this outcome.
