Get smart budgeting
Claire Mansfield and Maia Beresford, The MJ, 2 December, 2014

Councils have come a long way in changing how they think about their places and the services they offer their citizens. Many are looking at new approaches to place, based not on outputs, nor on how they run individual services, but on the impact they can have on the people who live in their districts.

This approach may have been accelerated by austerity, but it would always have been the right approach – cuts or no cuts. This is not just about making savings and efficiencies – vital when budgets have been slashed to the hilt, but about getting better outcomes, life chances and benefits from their services for their people.

Doing so has required a huge shift in the way councils approach strategic planning. What once felt natural – to plan service by service and department by department is now under question. Users with multiple needs were having their services duplicated in ways both baffling and inefficient. So many services are now planned from the end result backwards.

But the financial planning of councils has largely not follow suit. Budgets remain siloed, attached to departments and services not places and outcomes. This has led to an inconsistent approach to the cuts.

While leaders try to approach the new world in a strategic way, their budgetary processes are forcing them to return to a world of salami slicing: a little off this department, an end to this service. To put it simply, local authorities are facing 21st century problems with a 20th century approach to budgeting.

In our research, NLGN calls for councils to follow through on the strategic changes being made by also changing how they approach financial planning, bringing it into line with an outcomes based approach.

This will require enormous cultural change across both the sector and within councils themselves which will be challenging. But change is now fast becoming the norm in local government, and we know from our research that the appetite for such change exists. It just needs to be harnessed in a way that ensures all staff are involved at every level.

For example, East Hampshire asked Service Managers to draw up new business plans with no access to historic data. With nothing to benchmark against, this forced a re-evaluation of where the money should be going based not on where it had been, but what it was needed for.

By both challenging and supporting staff through change in this way, councils will be able to make the cultural difference at every level required to look at financial and strategic planning in a better and more aligned way.

It is also vital that members and citizens feel engaged at every step of the process too. Under the old system, members would sign off budgets presented to them with little understanding of how they directly align with their political priorities. By setting those priorities in both the council’s strategic and financial plan, members can both bring their knowledge of the neighbourhoods they represent while also setting the goals on which they were elected and wish to be re-elected.

But this does not mean these goals should simply be a conversation had with citizens in the heat of an electoral cycle. People know that councils are being forced to cut services. The more they feel a sense of ownership over the council’s priorities, the better their own sense of the tough decisions will be.

‘Smart budgeting’ is not a panacea to sooth all the ills of the cuts to come. But it will be part of an essential suite of measures that will held councils through these very difficult times.


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