• Home
  • About
  • Subscribe
  • LATIF
  • Conferences
  • Dashboard
  • Edit My Profile
  • Log In
  • Logout
  • Register
  • Edit this post

Room 151

  • 151 BRIEF

    What's New?

  • Homes England agrees strategic partnership with two authorities

    June 29, 2022

  • Soaring inflation and pay pressures to add £3.6bn to council budgets

    June 28, 2022

  • Underfunded social care reforms could ‘exacerbate workforce pressures’

    June 27, 2022

  • Nottingham City Council leader labels proposed intervention as ‘disappointing’

    June 27, 2022

  • Government preparing to intervene in Nottingham City Council

    June 23, 2022

  • Low earners at Surrey County Council receive 7.85% pay increase

    June 23, 2022

  • Treasury
  • Technical
  • Funding
  • Resources
  • LGPS
  • Development
  • 151 News
  • Blogs
    • David Green
    • Agent 151
    • Dan Bates
    • Richard Harbord
    • Stephen Sheen
    • James Bevan
    • Steve Bishop
    • Cllr John Clancy
    • David Crum
    • Graham Liddell
    • Ian O’Donnell
    • Jackie Shute
  • Interviews
  • Briefs

Outcome based budgeting: It’s all about culture and management

0
  • by Guest
  • in Technical
  • — 19 Mar, 2020

Outcome based budgeting offers opportunities to uncover vital insights. Rebecca Hellard reveals her experience.

I was recently asked about my current challenges and concerns. I like to turn these into opportunities and adventures wherever possible.

Currently, I’m working with an authority covering the CFO and s151 role, alongside a great set of people all driving forward improvements across the board.

One of our key challenges is not so much balancing the budget for 2020-21—we have all been through austerity and funding cuts over a number of years, and we have more certainty on social care grants for future years—its more about developing the vital insight underpinned by “outcome based budgeting”.

Keep in touch – register for Room151 treasury and finance meetings ONLINE

I realise that this is terminology that has been around for a good few years, but it’s difficult to find examples of councils that have set it up in-depth and in a way so that it becomes the intelligence beneath the business plan outcomes.

If you are in the fortunate position that I find myself in with the implementation of a new ERP system, then I am sure that you are grabbing this opportunity, as I am, to get the ledger set up to address outcome based budgeting whilst still retaining cost centre budgeting.

Mapping

The key difficulty I have found, and continue to find, is that an organisation needs to be set up to be managed by outcomes and be able to map how each service links to each outcome.

This sounds straightforward, but when an organisation starts to make this shift it is both a management and a cultural move. Without this, it’s purely a technical and reporting exercise that, in reality, won’t deliver the focus on performance where it really matters.

Most corporate business plans now have clear outcomes in them, but not many can drill down into objectives that can be quantified in any depth. That then breaks the vital golden thread down to service contributions or, indeed, team and individual appraisal objectives.

We work in a complex world where it is rare for an outcome to be delivered solely by any one service. Often as not, more than one organisation is substantially involved in delivery of a single outcome. This makes it really complex to achieve outcome based management, let alone outcome based budgeting.

However, outcome based budgeting also highlights a mismatch, between service delivery and delivery of outcomes, and silo working between services. Spotting this allowed for redirection of effort and more effective delivery. It is absolutely vital to measure impact on the areas that matter.

ERP

Implementing a new ERP is such a huge opportunity. You can set up the chart of accounts exactly as you wish so much easier than having to reshape an existing set

It also signals a new approach, start of a new era; an opportunity to reset. The new ERP systems are much more intuitive, with much more reporting capability which gives much better intelligence to the organisation.

This is so important to the organisation as it gives insight into impact as well as effective use of resources. I know how tough it is to implement a new ERP, but if it is done well and cultural change is the key focus it can, and does, deliver significant improvement in performance to citizens, which is why we get out of bed and work so hard.

I am by no means saying that we have got this sussed, but we are on the journey. It’s excellent to have members pushing for this too, and totally understandable with their focus on outcomes that really matter to them.

It would be great to hear from others that are on the same journey or further along the path.

Rebecca Hellard is a freelance director of finance and currently interim CFO at Birmingham City Council.

Subscribe to our free newsletters

Share

You may also like...

  • Helen Randall: Spelthorne report places spotlight on ‘controls’ Helen Randall: Spelthorne report places spotlight on ‘controls’ 25th Feb, 2021
  • Audit improves but problems and uncertainties remain 4th Nov, 2021
  • Richard Harbord: September accounts sign-off a ‘fantasy’ at many councils 10th May, 2021
  • 2022 is the year for confronting ‘chaos’ in audit and accounting 14th Dec, 2021

Leave a Reply Cancel reply

You must be logged in to post a comment.

  • 151 BRIEFS – WHAT’s NEW?

    • Homes England agrees strategic partnership with two authorities
    • Soaring inflation and pay pressures to add £3.6bn to council budgets
    • Underfunded social care reforms could ‘exacerbate workforce pressures’
    • Nottingham City Council leader labels proposed intervention as ‘disappointing’
    • Government preparing to intervene in Nottingham City Council
  • Room151’s LGPS Roundtables

    Biodiversity
    Valuations & Risk
    LGPS Women

  • Room151’s LGPS Roundtables

    Biodiversity
    LGPS Women
    Valuations & Risk
  • Latest tweets

    Room151 2 hours ago

    Hillier confirmed as keynote speaker for LATIF/FDs’ Summit: Dame Meg Hillier, chair of the Public Accounts Committee, has been confirmed as a keynote speaker for Room151’s combined Local Authority Treasurers Investment Forum (LATIF) and FDs Summit. The… dlvr.it/ST70F7 pic.twitter.com/hxV676Iley

    Room151 2 hours ago

    Councils’ funding at risk due to ‘undercounting’ in census data: Population estimates in London and Manchester may have been significantly underestimated in the 2021 census potentially threatening government funding for frontline services in these… dlvr.it/ST707J pic.twitter.com/VncIyaXa01

    Room151 2 days ago

    Gove at LGA: councils to receive two-year financial settlement: Michael Gove has announced that councils will receive a two-year financial settlement from next year to provide authorities with “financial certainty” and allow them to plan ahead. The… dlvr.it/ST0kSV pic.twitter.com/wxL3UM4sGO

    Room151 2 days ago

    LGPS valuations: the digital journey: Rob Bilton explains how technology is helping to deliver one of the most complex data exercises in the world of public sector pensions. The 2022 valuations for LGPS funds in[...] dlvr.it/ST0kMq pic.twitter.com/VxjSPC2Uvo

    Room151 6 days ago

    Conrad Hall: ‘more sophisticated’ regulation needed for local government: The chair of the CIPFA/LASAAC Code Board has questioned the sophistication of financial regulation in local government and the continuing focus of the Department for Levelling Up,… dlvr.it/SSnPBV pic.twitter.com/G5d7JCWF8c

    Room151 1 week ago

    Slough Council approves plans to restructure finance department: Slough Borough Council has approved plans to restructure its finance department to enhance capacity and capability and to address a “significant weakness” in the function. The local… dlvr.it/SSf8DG pic.twitter.com/l5lmyHmkBg

  • Register to become a Room151 user

  • Previous story LATIF North moves online adding focus on COVID-19 to treasury management agenda
  • Next story Funding gaps and how to manage them

© Copyright 2022 Room 151. Typegrid Theme by WPBandit.

0 shares