Westminster – Financial Context

• Following the economic downturn the Council has seen a significant impact on a number of

income streams through large reductions in activity in a number of key areas.

• The Local Government Finance Settlement resulted in large reductions in Local government

funding.

• Following on from this, Westminster have pledged “to do more with less”. The council has a key

priority to maintain a balanced budget going forward whilst continuing to improve the delivery of

their services.

• This necessitated the delivery of the Councils £60m savings programme to balance the budget in

2011/12.

99% of £60M 2011/12 savings delivered

£9.3M service area under-spends

£0.9M net corporate under-spends

£3.7M earmarked for project Athena

£6.5M increase in reserves (to £22.1m)

-10.2M +10.2M

COUNCIL'S FINANCIAL STRATEGY Against the background of severe financial pressures within the public sector, the Council's financial strategy is based on:

Making effective use of resources through efficiency, careful prioritisation of service plans and rigorous financial management;

Seeking new ways of service delivery, for example through sharing services with our Tri-Borough partners.

We anticipate that the pressures on public expenditure will continue to be severe. This will combine with rising service demand and economic pressures, requiring continuing focus on the best means to deliver cost effective services. Recognising the realities of the current and prospective economic climate, the Council carried out a series of service reviews in 2010. From this, a range of service changes and efficiencies were identified for implementation through 2011-2013. The savings across two years total £84 million and, at the end of the first year, the majority of savings (£64 million) have been delivered and the remaining stages of the programme are on track for delivery through 2012/13. As a consequence of this proactive focus on medium term financial planning, costs (including redundancy

and change costs) have been contained, risks managed and Reserves are higher than projected. It is

anticipated that Reserves will continue to strengthen over the next two financial years.

Where the council’s money comes from?

Where the money is spent?

Capital Programme

Financial Operating Model

Monthly Monitoring Cycle

Principles underpinning Finance Foundations

A need for Strategic Financial Management

3 Objectives:

1) Financial Awareness

a. How we get funding and use our resources (Income maximisation, understanding debt and asset utilisation)

b. How does the wider economy affect us (The impact of changes in interest, inflation, growth rates)

c. Differences and uses of budget vs. actual/forecast/cash flow (The different financial measures and their respective uses)

2) Decision Making

a. How we control our finances (Regulations, budget monitoring, cabinet/peer decision making)

b. Understanding and challenging other peoples analysis (Role of leaders to review and challenge analysis, not create analysis)

c. Understanding financial implications and commercial analysis (Cost-benefit, net present value, opportunity cost)

3) Risk

a. Is it a risk or an opportunity (Linking business planning to financial impact)

b. Risk vs. reward, are we too risk averse c. Risk management and mitigation (likelihood vs. impact)

External Case Studies

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Master Classes

The master classes for Strategic financial management would be held on the following

dates:

26th October – 13:30-16:30 – Committee Room 3/4, 17th Floor, City Hall

31st October - 13:30-16:30 – Committee Room 7, 17th Floor, City Hall

8th November - 9:30-12:30 - 14th Floor South East Meeting Room, City Hall

20th November - 13:30-16:30 - 14th Floor South East Meeting Room, City Hall

23rd November - 9:30- 12:30 - Committee Room 5, 17th Floor, City Hall

4th December – 9:30 – 12:30 – Committee Room 6, 17th Floor, City Hall

Book your place by visiting the Interactive Area section on the Leadership Hub –

www.westminsterleadership.co.uk