East Devon District Council ‘coasted’ for many years, satisfied with what it believed were good and cost-effective services, paid for by a low council tax. But the quality of services was less good than the Council believed and the costs were propped-up by the unsustainable use of reserves. As the reserves declined, the Council recognised it had radically to change the way it delivered services, review which services it provided and improve its financial management.
The appointment of a new Chief Executive and the election of a new Leader helped the Council to adopt a different approach. Councillors accepted the severity of the Council’s problems and made difficult decisions, cutting some services to enable the Council to achieve a balanced budget.
These decisions were guided by a re-evaluation of service priorities and worked out through setting up a Leader’s Service Priority Group, which considered the activities and budgets of each service directorate. Low service priorities suffered spending cuts, leading to a drop in funding of economic development initiatives and the externalization of leisure centres to a newly created leisure trust.
It was the Council’s adoption of a three year medium term financial plan (MTFP) that had enabled it to see that its use of reserves was unsustainable and needed radical change. But that first MTFP was too superficial and inadequate for the severe challenges the Council then faced.
In response, East Devon adopted a new, more comprehensive five year medium term financial strategy (MTFS), which included detailed service and financial planning. The Council reviews the strategy in detail at least once a year. The Council has fully integrated its improved system of service planning with financial planning and management, and linked both to corporate business planning.
The Council recognises that maintaining improvement of its financial management will only be possible if it improves corporate governance standards and members’ capacity. Accordingly, the Council has begun extensive member training. The Council now operates balanced budgets and is in the top quartile of councils for the percentage of improving performance indicators.