Budgets and the back office, by Steve Freer

14 Dec 10
Management and back-office costs are set to be hammered in the quest to protect frontline services. But is anyone taking the trouble to work out exactly what the impact of those reductions will be?

I have been having a few difficulties with my bank recently. I am a telephone banker and find that polite call centre staff can handle most of my routine business without too much difficulty. But the moment we step outside of pretty narrow tramlines, the service regularly judders to a spectacular halt.

Can I speak to a manager? No. Can I be put through to speak directly to my branch? No.

The impression is that I am dealing with an organisation that needs to prioritise investment in more and better management and support services to rescue a frustrating customer experience.

All of this feels very relevant to yesterday’s local government finance settlement. Management and back-office costs seem set to be hammered in the quest to protect frontline services. But is anyone taking the trouble to work out exactly what the impact of those reductions will be?

Will we end up with an empowered front line freed up from the oppression of unhelpful support and excessive layers of intrusive management? Or will we find ourselves dealing with organisations, like my bank, in which the front line creaks for lack of support and is incapable of dealing with non-routine questions?

These are precisely the issues that councils should be testing as they put together their budgets for next year. Compiling a balanced budget is a tall order but it is a means to an end, not an end in itself. Efficient services is the end game and every potential cut should be modelled to understand its impact on customer service. Over-simplistic mantras – back office bad, front office good – run the risk of obscuring the very thing we want to protect.

Listening to the settlement announcement I was struck by a particular irony. As some frontline services prepared to close their doors for the day, finance staff were sending out for fish and chips. Another long night lay ahead to analyse and understand all the figures and to prepare and rehearse options and advice for decision makers to review first thing this morning.

The best finance teams will infuse this work with their own creativity and innovation and in doing so will make a huge (though perhaps never appreciated) difference to the local communities they service. It might be the back office but boy, does it matter.

Steve Freer is the chief executive of CIPFA

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