Finance deadline day
I love football’s transfer deadline day. Yesterday was full of all the drama and expense that you come to expect twice a year, when football clubs up and down the country take a look at their squads and decide to make changes.
For over-the-top fans like me it’s time to take an early day and plonk down in front of Sky Sports News and tune in for as long as possible, especially the few hours leading up to Big Ben striking 11.00pm and an hour or so after to find how many players have come in to or left your club, and what other big moves have happened around the country and the world.
This year well over £445m changed hands over the course of the summer, and the sheer levels of cash swapping hands for footballers got me thinking about how local government faces just such a situation every year itself.
At first thought it may not seem obvious what this situation may be. Local government officers aren’t traded, bought and sold between authorities, with chief execs looking to bring together their own blends of youth and experience within their teams.
No, I’m actually talking about the time which in some authorities is beginning now, in some places has been ongoing for a while and in others will happen in the few days preceding a final decision; the budget setting process. During these times the finances for services are discussed and decided, with managers and finance experts fighting to secure the signitures and support to allocate funding to their own pet projects and teams.
Whilst a significant percentage is of course allocated to predetermined purposes and has little flexibility attached to it, there is more than enough available which is less well defined in terms of limits, and can be allocated by local politicians and officers as required locally. With the new powers provided by the Localism Bill local authorities should have more ability than ever before to identify local needs, meaning that the horse trading can begin in earnest.
Until the final vote takes place (and sometimes a little after this time), backroom meetings are had all over Council offices as cases are made for funding to be directed or redirected to or from certain services. Often the public are provided with the ability to contribute through various consultation processes such as online budget simulators, events, surveys and meetings, but the final say sits with local councillors and/or elected mayors.
In football the process, decisions and outcomes are fairly clear; club A wants to buy player A from club B, so approach club B to agree a suitable compensation package. Once agreed, club A talk to player A to agree personal terms, before player A agrees to join them and their registration is transferred. Of course not all transfers are this simple or clear cut and often involve a lot of other parties, but effectively the process is out in the open.
Not so with local government funding decisions. Public meetings can often set out a clear direction for funding, but often the devil is in the detail. A councillor may announce that they are going to invest £xm in a certain service, only for officers to then be tasked with finding this money and allocating it appropriately. Often times if possible funds will not be moved, but reports will be re-written and different angles used to show that the same funding is achieving different outcomes.
And all of this will go unreported, as local government finance is nowhere near as straightforward – or to be frank, interesting – as football clubs doing their business. I can’t imagine a team of people reporting outside town halls up and down the country as Councils make and change their minds on service funding decisions in the run up to agreeing them; the image of a running totaliser of how much money is being saved might look attractive at first, but the sheer level of detail and number of caveats attached to each and every decision would make it impossible to manage properly.
Most Council’s spend most of their years analysing their budgets, working out what they are spending where and cutting it up in different ways depending on the needs of the services. The figures bandied around of how much money needs to be saved and the language used around finance is too often simplified to the point that the average person believes that there are simple answers that are being ignored. Tha financial arrangements of local government are mind-bogglingly complicated and difficult to unpick by the best of us; even meetings between different financial teams filled with experienced accountants often provide nothing but disagreements and different interpretations of the facts.
Residents need to be involved in shaping these decisions, but first they need to be supported to understand the details and complexities as well as possible. Simply saying that a service can have its funding cut because they spend a lot of money, or that a different service should be saved because it’s always been delivered is not good enough and goes nowhere towards helping people make truly informed decisions.
Perhaps Councils should consider what lessons it could learn from Sky Sports News. Are there infographics which could be developed to better demonstrate how much money is being spent and saved rather than simply providing a thick report full of tables and figures? How could appropriate information and process be explained from a residents perspective rather than from an accountants? If reporters up and down the country last night had been quoting the precise list of demands and financial dealings taking place around them, almost certainly no-one would be listening. Whilst some of this information may go on to be available, they instead took the figures and details required to inform and educate their audience and found simple ways of sharing this information.
Finances are very difficult to understand, and the skill of understanding them is massively underappreciated. However, it is more important than ever that we spend a little time and money making sure that other people understand the headline figures, and that we are creative in doing so.
Who knows, perhaps one day Jeff Stelling might just be reporting on the budget decisions at his local council, live and in 3D.