Successfully balancing council budgets is not just about the cash

28 Sep 18

Officers and members need to communicate and work together to find solutions to the many challenges facing local government, says Cliff Dalton, CIPFA’s head of advisory services

There has never been a more challenging time to project, predict and balance the council budget than now.

Grants to local government have been slashed by around 60% over the past 10 years. And there are no guarantees that things will change anytime soon.

Forecasting beyond 2019 and the next spending review is a difficult and dark art given the Fair Funding Review and ongoing discussions about ways of assessing spending need, tax allocation (both local and central), delegated new burdens and the mystery that is business rate retention.

On the demand side, ‘need’ typically outpaces budget, especially in key statutory areas such as housing, children services and adult social care where costs can spike with little or no warning.

What is important is the decision-making culture that turns data into good and timely actions

Local government, though, is nothing if not robust and reliable in finding solutions and a path forward. Despite uncertainties, there are many examples of good financial planning and decision-making that continue to keep the Section 114 notices at bay.

But what separates the best from the rest when it comes to service planning, responding to sudden change in need and balancing budgets?

Understanding and projecting activity levels is a key essential as far as the resources are concerned, but what is surely far more important is the decision-making culture that turns data into good and timely actions.

And the only way that this can truly happen is through a healthy and trusted relationship between a council’s officers and its members.

Officers can project, predict and suggest all they want behind closed doors, but if their proposals don’t reflect council policy and priorities or if there is a reluctance to share bad news then things can easily go south.

Building a robust medium term financial strategy is about far more than crunching numbers, good financial monitoring and demand management. It is collaboration, communication, ownership, vision and trust, especially between council officers and members.

On 13 September, CIPFA and the Centre for Public Scrutiny ran a joint conference at the House of Commons aimed at supporting and informing councillors on the challenges facing local government.

How well are they informed of the key issues being considered by their officers? How engaged are they in developing solutions, rather than just being presented with something to vote on as a closing action? What was the overriding relationship and culture that exists between those that advise and those that decide?

We were also keen to get the members’ perspective and how well they think their organisations are managing current challenges.

Building a robust medium term financial strategy is about far more than crunching numbers… It is collaboration, communication, ownership, vision and trust

Speakers included CfPS chair Lord Kerslake, CIPFA vice president Caroline Williamson and Mike O’Donnell, associate director of local government at CIPFA. All shared their thoughts and considerable experience on what ‘good’ looks like in local government and local democracy in action.

The conference was sold out (evidence enough of how important this issue is) and the councillors attending were highly engaged and keen to share their thoughts, as well as examples of good and sometimes bad practice. Stories were shared and everyone had something to offer and something to learn.

A common request from members was for officers to engage more when first looking for service solutions – especially when looking for ways to balance the books.

Because members really do get the message of how tough an ask this is (and is likely to remain). Shielding or not involving decision makers when looking for options and solutions can ultimately prove a waste of energy if ‘red lines’ are crossed and actions cannot be signed off.

Councillors are elected to make a difference in their community and during these difficult times that should include an influencing voice on what services are preserved and what changes.

Officers need to commit to engaging with members, rather than simply paying lip service and placating somebody on a working group simply because they are needed to vote a certain way at a future council meeting.

Local government only really works when we all get behind the difficulties currently facing the sector

But perhaps the bigger surprise emerging from our conference was whether members in executive roles shared and engaged with backbenchers. Many felt more could and should be done to keep all councillors informed on key decisions, not just portfolio holders.

This is good democracy in practice and helps all members see they are positively shaping the future of the council. It also helps them spread the word with the wider electorate and with succession planning for when leading members want to step down.

Our conference was a reminder that local government only really works when we all get behind the difficulties currently facing the sector. There should be no ‘them’ and ‘us’ attitudes among officers and members, especially on the fundamentals of balancing the books or making decisions on future policy and service delivery.

Those that are managing best just now, especially on council finances and the conundrum that is a balanced medium term financial strategy, know that success is not just about the cash.

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