The media loves stark headlines about council budgets. But what’s actually involved in setting one? We asked our Deputy Chief Executive and Chief Finance Officer, Graham Ebers, to explain.
“The budget is a financial representation of a council’s strategies and priorities, and is a lot more than just numbers. If we don’t allocate money wisely we cannot do those things important to our residents.
We start budget setting in May and it ends when our elected members approve it the following February. It’s a constant cycle of analysing data to clarify need, creating and appraising options, prioritising, and difficult decisions to keep within the tight financial envelope.
First, we work out our total income from Council Tax, fees and charges, and government grants. From this, we identify the costs to cover statutory service levels such as adult social care, children’s services, and waste.
As these statutory services take up a significant amount of our income, we must continually find ways to reduce their costs and demand. For example, early intervention strategies to help reduce obesity. Many of these measures require spending now, although the benefits may not show until later.
Another key strand is creating ways to generate new income to fund services. Our Wokingham town centre regeneration is an example, as are our commercial property investments.
Once we’ve maximised our income and covered statutory services costs, we target what’s left on our key priorities and non-statutory services such as leisure and parks.
There are two distinct types of costs. The first is ongoing such as grass cutting and refuse collection; the second are one-off investments in our assets such as new roads and schools. In both, where we have discretion, we prioritise based on need as well as the positive impact they’ll have on your communities.
Generating as much additional income as possible from third parties is also key. This includes developer contributions for roads and grants for cycleways. And we invest in assets such as leisure centres to more than cover their borrowing costs while also improving community facilities.
Like all local authorities, central government funding has significantly reduced – we saw a complete withdrawal of the general grant in 2017/18 – set against a backdrop of ever-increasing statutory costs. This makes our decisions challenging because the goal posts are always moving.
But we’ve weathered the storm well so far. And we’ll continue to be innovative and diligent to safeguard those services you value the most. This is at the heart of our budget setting.”
This is how we are dividing up our £125m budget this year (excluding £86m spend on schools which is funded by a government grant):
Adult social care and wellbeing 41%
Children’s social care and safeguarding 22%
Environmental services (incl. waste/ recycling and grass cutting) 14%
Highways and transport (incl. highways maintenance) 4%
Corporate and democratic care 2%
Other frontline services (incl. libraries and community development) 14%