Can budgeting be a transformation tool? Three Tips from our Innovation Exchange

December 4, 2019   By Rich Nelmes, Head of Network and Events, NLGN

Many of us in the local government sector are all too well acquainted with you the negative side of the budgeting process. As demand seems to consistently rise, money gets scarcer and less certain. It can be difficult to see the opportunities when it comes to budgeting, more so the potential for it to be an engine of change.

Recently, Local Partnerships and NLGN partnered to draw together councils from across NLGN’s network to discuss ‘Outcomes Based Budgeting’. The format of this Innovation Exchange is unique in the sector – a day of intensive, peer-led learning, facilitated by experts. With no pre-prepared speeches or PowerPoints everyone is expected to contribute as much as they take away.

Outcome Based Budgeting specifically allocates scarce financial resources to achieve priority outcomes, linking resources with results much more closely than the traditional process. Some participants had already started this journey, others wanted insights on what would be involved.

In the first part of the day participants put their energy into identifying major challenges to implementing this new approach: recalibrating the relationship between the finance function and wider organisation; refining the new approach and demonstrating meaningful impact.

In the afternoon, stories of silver bullets, bear traps and red herrings were shared in a supportive and constructive way. A full insights report [[link to members’ section]] is available to NLGN members and organisations that work with Local Partnerships, but here are a few of my key ‘takehomes’:

  1. Focus on the community
  2. Community involvement can be very prescriptive and it’s difficult to get out of this culture. Reframing budgets to be explicitly ‘community-first’ can be incredibly helpful in breaking down silos and challenging old ways of working positively.

  3. Adopt a long-term approach
  4. No matter what stage they were at, all participants said that the changes they were discussing didn’t happen overnight. There were false-starts, difficult conversations and, at times, double-running. Knowing the effort required and time-frame involved and communicating both with colleagues, especially senior leadership, is crucial.

  5. Embrace flexibility
  6. Participants agreed early on that there was a need to suspend the statutory/non-statutory distinction when discussing this new approach. Non-statutory work can actually be a huge help in achieving the outcomes of big, statutory departments, such as elderly care.

There’s no getting away from the fact that local government finances are incredibly stretched and more money is desperately needed to keep vital services running. I was, however, buoyed by officers’ confidence and creativity when they have that precious space to look beyond the daily grind. We’re looking forward to working with Local Partnerships in the future, helping councils share and discover the innovation we need for future challenges.

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