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NLGN calls for local government financial planning overhaul

Councils cannot radically improve their services without simultaneously innovating in their financial planning procedures that allocate resources to deliver these services, according to the New Local Government Network (NLGN). 

In its latest report, ‘Smart Budgeting: Integrating Finance and Strategic Planning for Outcomes’, it has recommended that local government should integrate the budgeting process into a ‘smart cycle’. 

This cycle comprises of a number of elements such as adopting practices like shifting the focus to outcomes, using and integrating both financial and non-financial evidence, and integrating long-term planning for prevention into the budget process. 

An essential part of this is ensuring that councillors, officers and residents are engaged throughout the budgeting process so that outcomes are both robust and fully understood. 

In addition to this, NLGN suggests that central government needs to give more certainty about expected levels of funding over the medium to long-term. 

Simon Parker, director of NLGN, said: “Many councils have come on in leaps and bounds when thinking strategically about their planning processes. 

“Now it is time for the way they manage their finances to follow suit. Working in a way that fully integrates an outcomes based approach throughout the financial planning for local authorities is the missing piece of the puzzle towards developing robust 21st century places.” 

There is an appetite for change as NLGN’s latest survey found that more than 80% of the councils surveyed were open to new approaches to budgeting and around half thought using a different budget process would improve outcomes for their communities. 

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