Councils should radically reform the way they approach budgeting, focusing on outcomes rather than outputs, a new report is arguing.
The report, published by the New Local Government Network (NLGN), calls for councils to stop following old patterns of budgeting based on traditional incremental budgeting for individual departments. It says a smarter approach would ensure every pound spent goes towards meeting outcomes instead.
Director of NLGN, Simon Parker, said: ‘Many councils have come on in leaps and bounds when thinking strategically about their planning processes. Now it is time for the way they manage their finances to follow suit.
‘Working in a way that fully integrates an outcomes based approach throughout the financial planning for local authorities is the missing piece of the puzzle towards developing robust 21st century places.’
The report, published in association with the ACCA and Mazars, also called for bringing much longer term planning for prevention into the budget process.
Gillian Fawcett, head of public sector at ACCA, added: ‘An incremental budgeting approach, using last year’s budget as a starting point and simply ‘slicing the salami’ is not good enough. The danger is that there will be no salami left to slice if new and innovative budgeting approaches are not adopted by councils.’
