New budget-setting plan proposed to help make major savings at council

A new approach to setting budgets is being proposed to help Shropshire Council work towards further savings in the region of £80 million within the next three financial years.

The council is reviewing the budgets of all departments in the face of major Government funding cuts, and is taking the step of using zero-based budgets for the first time.

That means every department will start with a budget of zero and produce a business case for the amount of funding it needs to run its services, rather than being given a prescribed budget as in previous years.

So rather than just looking to cut budgets, departments will take a fresh approach to what outcomes they are working towards and how they can be delivered as efficiently as possible in new innovative ways.

Finance officers hope the new approach could help reduce some budgets by up to 50% over the coming years.

The proposals will be considered as part of a report detailing the financial strategy for 2014/15 to 2023/24 being presented to Cabinet on 24 July 2013, which outlines the scale of savings that the council needs to achieve.

The report explains that £80 million needs to be found from 2014/15 to 2016/17, which is on top of this financial year’s savings target of almost £24 million.

Council leader Keith Barrow said:

“We are fundamentally changing the way we work because the financial position we are in now is a world away from the situation just a few years ago.  We have to reduce the amount the council spends, and we think that making every department justify how much budget they need rather than just giving them a pot of money will help do that.

“It may seem like common sense, but this is actually quite a revolutionary way of working in the public sector, although it is of course commonplace in the business world.  The amount of money we are being asked to save over the coming years is huge, and we simply can’t carry on doing what we have always done.

“We are looking at a range of innovative ways of providing services differently, mainly based around commissioning services locally by asking people what they need rather than us telling them what we think they need.  As well as producing more efficient services which are better suited to people’s needs, this will save a significant amount of money too by cutting out bureaucracy and overlapping services.

“Zero-based budgeting is another way of driving down costs and making sure that council tax-payers’ money is going as far as it possibly can.  We are facing a big challenge and it won’t be easy, but I’m confident we can deliver.”

More information will be given about the changes taking place at the council as part of a consultation due to take place over the coming weeks.  Details of how you can get involved will be published soon.

The Financial Strategy report is item 10 on the Cabinet agenda, and can be viewed by clicking this link.