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Fantasy Budgeting

Fantasy BudgetingAt the 'Budget Council' on 4th March, Cllr Ken Hopwood asked a really thoughtful question accompanied by a sensible and reasonable request - to which we thought he was given an appalling reply.

To us, the reply illustrated the contempt in which rank and file councillors are held by Fylde Cabinet members.

It's worth taking a few minutes to examine what happened about this matter at the meeting and looking into the underlying logic.

In support of the overall broad budget figures in the Council Agenda, Fylde produces a detailed 'Budget Book' each year.

It's not as detailed as it used to be, but it does give a decent level of detail of spending broken down by department, so you can see for example, where the Chief Executive's allocation is expected to be spent - how much for salaries, how much for photocopying, books, periodicals, other supplies and services, and so on.

Once the budget is approved at Council, these books become the 'spending bible' of senior officers because they detail how much is available for wages and various materials etc.

Spending against these heads is (or at least should be) monitored through the year to highlight exceptions (where spending is too high or too low) and that allows corrective action to be taken.

It's not rocket science, it's just plain, solid, bread and butter management accounting.

Historically, the bog-standard way of doing this at Fylde is a four-column page that shows

  • Column 1: The actual spending on the item for last year
  • Column 2: The estimated spending or budget allowed for this year
  • Column 3: The most recent update of that spending
  • Column 4: The projected year end spending at current rates

And in previous years, the version of this book given to the Council has been similar in principle

  • Column 1: The actual spending on the item in the last full year
  • Column 2: The original estimate of spending for the year in progress
  • Column 3: The most recent update of spending for the year in progress
  • Column 4: The estimated spending for next year - to be approved at the budget meeting

From this layout it's pretty straightforward to see trends, and where changes have been made from previous years. It also shows the historic background to changes that might have been made for next year (the one you're being asked to vote on)

You have a solid year of known, actual expenditure that happened. You have a snapshot of how the present year is doing, and you have an estimate of the need for next year.

This is the sort of information which, if done properly, gives councillors a sense of ownership of what are actually *their* budgets, the ones they should argue over and establish priorities for.

Sadly, it doesn't work like that any more. Increasingly, rank and file councillors are being shielded from the responsibility that is truly and rightly theirs as our elected representatives.

And in the last two years, (it feels as though it is since Princess Karen took over the Finance Portfolio but we can't be sure) it has become even worse.

Because now, they have dropped the 'first' column from the budget book - so there is no actual spending recorded at all.

You can follow this link to Fylde's Finance page and download one or more of the new-style three-column fantasy-budget pages to see what we mean.

We suspect many in business will find this change unusual. It's clearly important to have a known basis from which to compare the proposed future spending with actual previous year spending.

But Fylde has surely dropped it.

Cllr Hopwood - a man eminently capable of resolving the fine detail of a budget book - had submitted a written advance question about this.

In it he complained that the new layout eroded the information available to rank and file Councillors whose responsibility it is to set the annual budget at full Council. He wanted to know who had authorised the change to three rather than four columns, and why they had done so.

He also wanted to know if they would revert to the former four columns, and again, if not, then why not.

Princess Karen, Portfolio Holder for Finance and Resources responded.

In essence, she said

  • the format is not prescribed in legislation, (so by implication, they can do is as they want)
  • The setting out of the budget is within the delegated authority of the finance officer, (so by implication, he decides how it is shown - and she appears not to have told him how she wants it set out )
  • Fylde already provides considerably more detail than most other councils
  • The budget book is a 'forward looking' document, it looks forward to plan next year, not backward at the last..
  • It is more useable in this format, and it is more 'forward looking'
  • And because of this she does not propose it should change

We regard her answer as a load of tosh. (we wanted to use a stronger word but there may be children reading)

Our impolite but summarised version of her answer is: We don't have to. We're not going to, so just push off.

The answer shows the contempt in which those who attempt to hold this awful cabinet system to account are treated.

It also shows how the Cabinet seeks to limit the information that is made available to rank and file councillors to disconnect them from reality and to keep them in the dark so they don't know what is going on.

We regard it as essential that a known actual spend is provided as part of the budgeting process. It's the only rock on which you can base the rest of the figures..

To do otherwise is fantasy budgeting, where everything is based on estimates and assumptions.

And to describe the reason for making the change as being to make it "forward looking" is plain rubbish. If that was the logic, you'd simply put next year's estimated spending in and leave it at that.

This is nothing to do with being 'forward looking', its to do with mushroom management (where you keep people in the dark and feed them a load of bull from time to time).

It's also to do with the arrogance of executive power.

We're surprised the Finance Officer let her get away with what she said.

He has - or at least should have - an overriding duty to properly inform the whole Council in its deliberation on the budget, he should be standing up to any pushy person who tells him to do otherwise. That's a responsibility comes with the big pay packet.

But he seems to have acquiesced with Princess Karen at least.

We see this as another illustration of how the officer class at Fylde seems to have its face turned toward David Eaves' hand-picked Cabinet, rather than to the Full Council we elect.

It's obvious to anyone and everyone that the councillors we elect need a proper solid basis from which to formulate their decisions.

To deny them access to such basic information as actual spending in the previous year is nothing more than the refuge of a tyrant who doesn't want to be held to account.


Dated:  8 March 2013


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