BLOG: Managing Finances in a Crazy World by Kieran Timmins (CfGS Associate)
Managing Finances in a Crazy World
- Prices rise at their fastest rate for 40 years – inflation already over 11% this year.
- Bank of England increased interest rates to 3%
- Energy costs are soaring. Households hit by £700-a-year increase in energy costs in April. It costs more than £100 to fill an average family car with petrol.
- Industrial unrest as unions look for cost of living pay increases
“We’re Doomed” – Private Frazer
If you are councillor grappling with tough financial decisions, these are my top tips for dealing with a challenging budget round and avoiding a Private Frazer mindset.
Focus on What You Are Spending – Not the Cuts
In challenging times the temptation is to focus on the savings plan – not what you continue to invest in. The savings are typically only a small percentage of your budget. If your remaining budget is £20m p.a you will still be spending £100m over the next five years…….That sounds like a fun job to do and where your eye needs to be. How will you invest that money to make the world a better place?
There Will Be a Solution
We all get those falling off the chair moments when it all seems a bit shocking and impossible. Try to stay calm and not to get overwhelmed. Organisations are more resilient than you think and you will find innovative solutions. The problem is always smaller than it initially seems.
Focus on What’s Really Important
Budget presentations are often quite traditional and not necessarily structured around what’s important to you or your business. Be demanding of your finance folk and expect thematic budgets. Are you really moving resources where you want them to be – not just slicing bits of what you have always done?
Look for the Opportunities
Change is challenging but brings great opportunities. If you can’t do what you used to who can? Can you work more efficiently with a new partner to get the same outcome. Sharing problems always makes things easier.
Look Beyond the Short Term
It’s easy to be caught up in the here and now. Don’t forget to take a strategic approach to your plans . How will this year get you to where you need to be in 3 or 5 years time. Things tend to look better if you focus on the horizon.
Be Kind
If you do have to make tough choices do it with fairness, openness and kindness.
