Insights from city financial realities: Comparing and learning across borders

Improved financial management and the sustainability of local governments is a key ingredient to future growth and the prosperity of countries, especially in an era where crises require countries to be prepared for resilience. However, a significant barrier to improvement in this regard is the insufficient exchange of knowledge from practitioners across borders. The contribution of this chapter is twofold. Firstly, we aim to provide insights from the frontline of local finance management based on the work carried out within the European City Economic and Financial Governance (CEFG) Group. The CEFG Group is a community of practice among eight European cities, wherein cross-border city level fiscal and financial management issues are discussed with city CEOs and CFOs. Secondly, we put emphasis on accounting, as this is the part of the regulatory framework that consistently influences financial sustainability, how local governments perceive themselves and how they are perceived by others. The CEFG Group represents an interesting and unique cross-border experiment to examine the threats and opportunities of measuring and comparing the financial health and sustainability of local governments. Also discussed in this chapter is the CEFG Group's own framework known as the financial health template, which contributes to cross-border comparability and demonstrates that comparison of local financial performance is possible despite the different accounting, regulation, legal and administrative contexts.