That time of the year again… Let’s talk money

The annual budget setting process is undoubtedly the most important period in any organisation’s calendar – it determines how much money can be spent and it also impacts on the organisation’s financial health because sustainable medium and long-term financial planning is an integral part of any budget setting round. We have now entered the hot period: January is always the busiest month and countless briefings, debates, consultations and questioning sessions are being held.

Here at Devon we adopted a new approach to budget scrutiny a few years ago: Individual scrutiny committees take a close look at the proposed budgets of the service area(s) they normally review before all scrutiny members get together and agree one collective set of recommendations to the Cabinet. This seems to work very well, especially because services cannot be looked at in isolation.

In December, the Cabinet agreed revenue spending targets for the different service areas across the Council. Place and corporate services will have to shoulder a reduction of 3% and 1.3% respectively, while the funding for People services is set to increase by 0.7%. Budget reductions place an even greater pressure on areas which are already struggling to maintain core services. For example, unforeseen events like the widespread flooding in Devon from July until December 2012 stretch budgets by millions of pound and you can’t plan for it.

The 2010 Comprehensive Spending Review (CSR) outlined real terms cuts of 28% in local authority expenditure over four years and the Chancellor’s last Autumn Statement confirmed that further budget reductions are anticipated for at least three years beyond the current CSR period, up to and including 2017/18. So while 2012 hasn’t been an easy year for local government, with a very difficult financial climate and increasing pressure to deliver more with less, the financial climate will remain unsettled in the medium term.

Our scrutiny committees will begin to review the budget proposals during January as follows:

Place Scrutiny on 21 January

People’s Scrutiny on 22 January

Health & Wellbeing Scrutiny on 23 January

Corporate Services Scrutiny on 24 January

Joint Budget Scrutiny on 28 January

We’ll keep you up to date with the budget setting process for the next financial year 2013/14 throughout January and February. Please do get in touch if you are concerned about any issues. Our email address is scrutiny@devon.gov.uk or give us a call on 01392 384383.

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