Tuesday, 12 August 2014

Camden's cuts challenge - post 2 - Outcomes-Based Budgeting

My first post on Camden's new strategy to meet another round of austerity budgets was set out here.  This set out the scale of the challenges and new measures we have undertaken to meet them.

Camden's new Outcomes-Based Budgeting (OBB) approach ensures that not only does the Council meet its financial challenges but that it still delivers the core objectives set out in the Camden Plan.  As the chart below illustrates, it marks a departure from traditional 'incremental' budgeting, especially when combined with a new approach to 'systems thinking.' 

Whilst the traditional approach to budgeting focus on incremental changes in detailed departmental categories of expenditure, the OBB process creates the potential for more innovative solutions just when we need them. 

So for example when we consider how we support communities, one option is that rather than simply investing in services run from many public buildings in one area, we'll look at how we can work with partners and other agencies, social enterprises and community organisations.  

While reducing investment is undoubtedly a difficult decision, it is preferable to closure and enables the council to save money while maximising the impact of the reduced investments that we make.

The Council has undertaken an evidence based analysis to collate the activities performed by each team across the Council, and to map how these activities contribute to the delivery of key strategic outcomes.  As well as the outcomes listed explicitly in the Camden Plan officers have used the data analysis to add outcomes that fully capture the work of the organisation, e.g. the core requirements to fulfil statutory obligations and provide good governance.

Each outcome was allocated a specific Delivery Lead in the council, who has worked in conjunction with a support team consisting of officers from operational services, Finance, Strategy, and Performance to develop alternative medium-term investment choices through which the Council could seek to achieve our strategic outcomes under a range of funding reductions - 'low', 'moderate' and 'substantial.' 

Over the summer preliminary meetings have been held with Cabinet members and officers to develop proposals to meet the £70m deficit based on this new model.  

Such is the challenge that all discussions we have had contain proposals for reducing, changing or stopping services.

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