Councillors and officers lack expertise to scrutinise budgets, report warns

The warning came in a report from non-profit Research for Action and the University of Sussex titled Openness & Democracy in Local Government: Making Financial Information Accessible, which also said that local authority financial information was hard to find, even for experienced researchers, accountants or councillors.

The research examined barriers to making local authority financial information accessible under conditions of austerity, strained council capacity, fragmented sources of finance, and lack of data standards.

It drew on expert interviews to understand existing issues with making budgets and accounts accessible to councillors and the wider public.

The report said limited understanding of finances among councillors is "due to lack of expertise, limited training and sometimes poor relationships with officers, which can restrict access to information".

It also said that some interviewees noted that "even council officers don't always have the right access or sufficient understanding of council financial information".

Elsewhere, the report stated that austerity cuts to local authority finances "have hit finance departments and officers do not have capacity to ensure financial information is accessible to elected officials and members of the public".

In addition, it said that accessibility of financial information "is often treated as a low priority and not recognised as a fundamental ingredient of public participation and effective democracy".

Based on its findings, Research for Action and the University of Susex made 12 recommendations, including calls to introduce new data standards for local government to improve accessibility, potentially via a Local Government Finance Act, and to mandate councils to attach a narrative report to their annual accounts, breaking down how money is being spent.

It also recommended mandating councils to use a standard e-invoicing format - as seen in the European Union - as well as making the Government's new Local Audit Office responsible for local government financial data to enable oversight of the sector.

In addition, it recommended providing greater support and training for councillors to enable better financial scrutiny and "foster a culture of healthy challenge within authorities".

Adam Carey