Like the first cuckoo of spring, the first newspaper article about “bungling bureaucrats caught out by snow chaos” has become as traditional a part of winter as carol singers and mince pies. This winter the criticisms of local authorities have been more sustained and widespread due to the exceptional prolonged periods of severe weather conditions. This has led to enormous challenges for FDs in local government as they faced the need to divert scarce resources into keeping roads and pathways clear while maintaining vital frontline services.

By and large most councils were able to put their well-prepared emergency plans into operation, but in many cases the assumptions of how long any cold snap could last were woefully inadequate and required new, innovative thinking to free up adequate capacity to meet the challenge. As a result, the FD has played a key role in reallocating resources to where it can bring immediate benefit. In many cases this winter, this has been achieved through hard work and cross-directorate negotiations – but wouldn’t it be easier if authorities were better prepared for dealing with the unexpected?

The key to responding to unexpected events is greater and more proactive management of council resources by FDs and their teams, particularly over the control of discretionary and project spend. Most finance teams are reactive in the way they deal with resource management as they are the experts in helping directorates set budgets and prioritise project allocations. Once the parameters are set, however, the tracking of whether the organisation is getting the results it expected from the spend is generally less well controlled and the reallocation of resources to where it is most needed does not always happen. Those authorities that monitor resources well can prioritise activities and make informed judgements on where they can be best used. Flexible resource management gives the local authority FD a clear line of sight on a day-to-day basis as to how to optimise scarce supplies, be it people, property or money.

The question that finance teams should be asking their directorates on a regular basis is whether the resources deployed are achieving the outcomes expected. One area where, in my experience, local authorities could do better is on projects. By their nature, most projects are discretionary expenditure, so a good way of freeing up resources to deal with unexpected events is to scale down or stop work on projects that don’t add immediate value. In recent years there have been enormous improvements in the discipline around good project approval structures, detailed business cases and project management in local government. However, from experience working with local authorities, there is still a great deal of work to do to ensure that envisaged benefits from projects are proven, tracked and delivered. Without adequate tracking of benefits, it becomes much harder to rank competing projects against each other and the default response from finance is to do nothing.

The biggest challenge from unexpected events is that you don’t know when they are going to happen. An FD with strong, proactive resource management in place will be able to make decisions quickly and from a position of strength. This will also serve them well as they deal with greater uncertainty over funding. One thing is clear though, whichever party is in power after the general election, there will be increasing pressure on public sector funding and the same agility that FDs have displayed during the recent spell of severe weather will be required in greater amounts over the coming months and years.

Feeling the benefit

I was recently working with a local government client who was proudly telling me about a project which had delivered a cash benefit of more than £1m. When I asked him how he knew this, he told me that the project manager had told him so. It transpired that there was no clear evidence of whether this supposed benefit had been realised or not and there was no obvious reduction in spend or resources freed up that could be seen. Was this a successful project?

A strong benefits tracking tool and supporting methodology is essential if you are to ensure that benefits achieved by a project are realistic and sustainable. Organisations should have a clear, common approach in which all benefits, both financial and non-financial have an owner who is responsible for delivery. Organisations should also adopt a simple way of capturing benefits and tracking them on an ongoing basis and, wherever possible, establish an outcome that can be proved, by reduction in spend, reallocation of resources or evidence of improved results. Competing projects can then be ranked and, if necessary, decisions on their continuation taken from an informed standpoint.

Oliver Colling is local government group senior manager at Grant Thornton