NALC update on the SAPPP review of proper practices for parish and town councils
We are highlighting upcoming changes to the proper practices for parish and town councils as part of a broader effort to improve governance and financial accountability in the sector.
Proper practices are the standards of governance and accounting that parish and town councils must follow if their income or expenditure does not exceed £6.5 million for three consecutive years. These standards are legally recognised through the Accounts and Audit Regulations 2015 and are mandatory for all smaller authorities. The Smaller Authorities' Proper Practices Panel (SAPPP), formerly known as the Joint Panel on Accountability and Governance (JPAG), is responsible for issuing these standards annually in the form of the Practitioners' Guide. The guide also provides vital instructions for completing the Annual Governance and Accountability Return (AGAR), which we publish alongside the Association of Drainage Authorities and the Society of Local Council Clerks under the SAPPP banner and is available free of charge to all parish and town councils.
Earlier this year, SAPPP unanimously agreed that a full review of current proper practices was needed. To carry out this critical review, SAPPP and Smaller Authorities' Audit Appointments (SAAA), the body responsible for appointing external auditors to smaller authorities, have appointed the Chartered Institute of Public Finance and Accountancy (CIPFA). CIPFA has completed an initial scoping exercise, identifying several areas where improvements can be made. Key issues raised include a lack of guidance on preparing council accounts, insufficient explanation of the distinction between revenue and capital expenditure, and a need for clearer instructions on how to account for assets such as property, plant, and equipment. There is also a lack of clarity regarding the differences between receipts and payments and income and expenditure accounting methods. Additionally, councils are not currently required to produce a balance sheet, which could provide a valuable snapshot of their financial position.
In the next stage of the review, SAPPP will be launching a sector-wide consultation on these issues and potential solutions. This consultation will be managed by CIPFA and is expected to open in autumn 2025. It will be promoted widely across the sector, and all councils are encouraged to take part and share their views. SAPPP is committed to ensuring that the new proper practices reflect the needs of the sector and support ongoing improvements in governance and accountability. SAPPP will review the outcomes of the consultation in January 2026.
We urge parish and town councils to keep an eye out for the consultation and to take this opportunity to contribute to shaping future proper practices.
