Tuesday, 12 August 2014

Camden's cuts challenge - post 3 - Camden's 4 spending tests for Budget 2015

Alongside the Outcomes-Based Budgeting approach set out in the last post, we wanted to create a framework for spending decisions which could be more easily understood by the public than last time.  

In the 2011 Budget, like others, we adopted a general test to 'protect the most vulnerable' and, generally speaking, then proceeded to cut all service budgets by approximately 20% (except for early years, which we cut by only 10%).

Through the next round of budget cuts we wanted  to take a less hurried approach, setting out how decisions would to a greater or lesser extent meet the tests below.  So in order to provide clear principles against which options, recommendations, and choices regarding investment decisions can be measured, in July the Council proposed a number of Investment Tests. These Tests are consistent with the aims of the Camden Plan and Finance Strategy and will act as reference point for  residents through the autumn that will inform many of the difficult decisions  as our funding continues to decrease.      

The idea was developed as a response to the tests set out in Fabian Society Commission on Future Spending Choices last year.   

The four Investment Tests are as follows:

Test 1: Tackle Inequality 
Inequality blights lives and creates a financial burden for taxpayers in future years. Camden's Equality Taskforce sets outs how growing inequality has social costs and is unfair. Tackling inequality and ensuring Camden is a place for everyone is at the heart of the Camden Plan. A key test for spending decisions will be 'how does investment reduce inequality among our residents'?

Test 2: Focus On Outcomes 
The financial strategy will implement a new way to budget resources based on aligning our spending choices to the outcomes we want to achieve. Services will work backwards from the outcomes set out in the Camden Plan, and then ask how these can be realised by working together across the council, and with other partners and residents. The Council will work more creatively with local people to achieve our goals, make greater use of technology, and be better at sharing assets with other partners to make them go further. Investment decisions will be made that will have the greatest impact on improving the lives of Camden's people. The key test will be ‘How does investment meet these outcomes?’

Test 3: Invest in Early Intervention Where Possible and In The Capacity to Act Decisively Where Necessary 
The Council will save money in the long-term by focusing on prevention and the cause of problems wherever possible, rather than just managing acute demand when it arises. This is cheaper, more sustainable, and leads to better results for everyone. However, we recognise that we will need to maintain some acute services to help resolve serious problems, even when the focus on early intervention reduces demand. We will make better use of the council's data and work to ensure early intervention is targeted where it has the biggest impact. We will reach beyond the end of the Camden Plan taking on board climate change, our demographic changes and the impact of the Digital Revolution. The key test will be ‘How does investment focus on prevention’?

Test 4: Make Every Pound Count
Left unchecked, organisations can become risk-averse or make perverse decisions. Making every pound count means improving productivity by providing effective solutions to residents’ issues. Problem-solving for the benefit of local people and getting it right first time will be hard-wired into everything the Council does. The Council will continue to make the best use of its assets, protect the public's money at all times and seek out opportunities to generate income to support public services. The key test will be ‘How effective is the investment?’

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