A changed approach to budget preparation has streamlined the process of service planning and brought about a focus on strategic objectives at Newcastle City Council.
This initiative recently took out the Gold Management Team Category in the NSW IMM Local Government Management Excellence Awards. Having averted a severe budget deficit in 1998-99 through last minute cuts Organisational Development Manager John Waghorn said the senior management team were determined not to repeat the laborious process in 1999.
It was felt more detailed guidance for managers would help streamline budget preparation. The result was a new Management Planning Manual which can be used as a guide by Council officers when preparing individual service plans and budgets. John Waghorn said it was important that before this happened the financial model was taken to Council to clarify the problems and proposed solutions.
He said parameters had to be put in place to achieve a balanced budget. This included having Council prioritise its capital works proposals so that the projects most likely to go ahead could be given more attention. “This meant better estimates for likely projects and improved forward planning,” John said. “It meant we had already made a significant start on the work when projects got underway.”
Following approval from Council, the Manual was rewritten to give better guidelines for more detailed and focused budget planning. As well as having their budgets conform to new guidelines and restricted budgetary requirements, departments were also asked to assess the impact of changes on their service levels,
This provided an opportunity to adjust proposals according to the strategic direction Council wanted to follow. “One of the advantages of the new process is that it encouraged cooperation among managers,” John Waghorn said. “Rather than simply looking to protect their own area they looked for ways that savings could be made across the board.
“This process also gave them the option of implementing what changes they thought would be useful in their area.” The net impact of the changes was that the preliminary budget submission came in at a half million dollar surplus. “This gave us the ambit we needed to reconsider some projects for inclusion according to Council wishes,” he said.
For further information contact John Waghorn, telephone (02) 4974 2000
