With the rate of inflation rising, current prices have increased to roughly 9.9% compared to this time last year. This is expected to fall at the beginning of 2023 and gradually decrease over the coming two years.
It is therefore important for Clerks and RFO's at Parish, Town and Community Councils to take this into consideration when planning their precept and budget for 23/24.
While precepts may need to be increased slightly to cover higher costs, significantly raising the precept to account for inflation is not the solution.
We’ve put together some tips below to help you lower your costs and combat inflation.
Why am I talking about Climate Crisis I hear you say? Bare with me. Take a look at the the main initiatives you need to deliver to reduce your carbon footprint..
- Use less
- Share more
Now look at these initiatives through the lens of a "Cost of Living Crisis". I think you will find the solutions to the Climate Crisis are the same as the Cost of Living Crisis. Through the rest of this blog you will see this theme surface.
Take time when budgeting and forecasting
Firstly, it's more important than ever to make sure you have scheduled enough time and effort to critically forecast your income and expenditure. If you have other tasks you need to get done, ask a team member or a councillor if they could temporarily carry out those tasks while you are focusing on your budgeting and forecasting.
Also, remember you can’t do this alone. So pre-warn your Councillors, committees and fellow team members that this year requires extra effort and contribution by all. Create a small project plan (this can just be a table in a word doc), which includes delegated tasks and deadlines.
When you have your financial plan in place, you could also review it with your peers by reaching out to your fellow Clerks and RFOs within your region. You never know, they might have covered a risk or assumption that you had not considered before (or vice versa).
Make it a monthly mission to ensure all your receipts and payments have been updated, coded correctly and reconciled against your bank.
A forecast is a snapshot model of what you think will happen over a period of time, based on historic data and assumptions. During periods of uncertainty, it's important to keep a much closer eye on income and expenditure to evaluate if it's matching what you have estimated. The sooner you realise that your forecast model is incorrect, the sooner you can adjust your financial position and avoid nasty surprises.
Complete an energy audit
Only 46% of energy is actually used in the UK, the rest is wasted.
It can be quite expensive and time-consuming to adapt physical infrastructure to make it more energy efficient. But energy usage can easily be reduced (or increased) by changing the settings on devices and/or human behaviour. For instance, take the humble personal computer. Left on overnight, it wastes enough electricity to print more than 500 pages (per night) and costs over £100 a year. Whilst this won’t change the world, every little counts (think the power of marginal gains).
We highly recommend you carry out an energy audit; review your lighting, heating, water, ventilation, building insulation, electrical equipment and most importantly human behaviour and awareness. Based on the results, create an action list of changes which will reduce your energy consumption.
SEFE Energy have a very useful audit checklist you can download here.
Ditch Your landline
You should switch your landline to VoIP solution.
VoIP stands for Voice over Internet Protocol, meaning phone calls go over the internet instead of conventional phone lines.
It's cheaper than a regular phone, as it uses your existing broadband connection, which means you do not have to pay for call charges and line rental, making it much cheaper than traditional landlines.
To dive deeper into this, read VoIP phone system costs
Stop printing and posting
Many local councils are frequently relying on paper to carry out their daily admin and communicate with colleagues, councillors, residents and customers.
Try and adopt digital solutions for your workflows and communications. As an example, we often find that Clerks will be printing and sending out 10s (or 100s) of letters to renew allotment fees. Lots of people now have email addresses and are happy to be communicated with via email. Sheringham Town Council advised they saved 2 weeks of work by switching from their excel and paper based solution to Scribe Accounts.
When you find you are preparing to print or post something, just stop for a moment and think if you actually need to do it. Maybe use that time to call or message your contacts first to see if they would be happy to receive an email.
Likewise, with Council meetings, consider emailing agendas and minutes instead of printing meeting packs. Include shareable links to finance reports for councillors to view. Happily print a copy if it's requested, but don't print by default. Follow the approach many retail outlets now take, they don’t give you a bag by default, it has to be requested. This approach has slowly changed our behaviour to adopting more sustainable (and cheaper) behaviours.
Increase your prices
You may generate revenue from assets, such as buildings, facilities, allotments, cemeteries, car parking etc…..
Whilst increasing prices and rates are not something we all like to do, it’s perfect acceptable if you have not changed your prices in the last 2 years.
To keep things simple, you can increase your prices according to the latest published rate, which is currently 8.6% for the HPI index (see here).
For tips on how to communicate your price increase, read How to Let Customers Know About a Price Increase (Without Making Them Mad)
Don’t forget your staff
While smaller councils may have one Clerk & RFO, larger councils may have multiple members of staff that cover different operations, and employee retention should definitely be included in your inflation-survival strategy.
If you were to lose a member of staff, you would then be faced with the costs of advertising for the open position, training and onboarding to get them up to speed.
For tips on keeping your staff happy, read 10 Ways to Keep Your Employees
Review 3rd party contracts and outsourced arrangements
Many local councils might outsource some of their work, such as their financial accounts to an accountancy firm. Consider reducing this cost and carrying out the work yourself. This may not be as onerous as you imagine, particularly if you use tailor-made accounting software such as Scribe Accounts, along with free training and support.
Lock in long-term agreements
This can work for both your suppliers and customers.
Talk to your suppliers and see if you can come to an arrangement where you have a longer-term contract with a fixed increase. Depending on your situation you might want to secure anything from a 2 to 5 year contract. Longer term contracts can give you peace of mind and certainty when forecasting your expenses.
Likewise, you could also do the same for your customers, giving you more certainty about your income.
Review Office space
If you operate your Town or Parish Council from office space, it's worth reviewing if you can:
- Downsize - move into a smaller/cheaper premise
- Co-share - move with another organisation or business
- Sublet - rent out spare capacity within your own office (even if its one desk)
- Work from home - close or downsize the office by allowing staff to work from home
Don’t forget, in all cases you can try to negotiate a cheaper rate by signing up to a longer term contract with your landlord.
Invest in technology
Commercial businesses will adopt technology to reduce costs, by adopting software tools and services to get more work done with the same or fewer people, keeping the overheads under control.
Lots of time can be spent and wasted using paper-based systems and spreadsheets to administer parish and town councils.
Scribe offers purpose-built software for parish, town and community councils that help over 900 customers save hours of work every month.
- Accounts - Transactions, Year-End, Invoicing, Bank Reconciliations, Making Tax Digital, Budgeting & Forecasting
- Cemetery Management - Cemetery records, burials, memorials, exclusive rights, mapping, inspections, and payments and invoicing
- Facility Hire - Single and block bookings, preferential rates, reminders, online public bookings, payments and invoicing
- Allotments Management - waiting lists/ tenancy agreements, plots, invoices and payments, along with inspections and notices
All systems include:
- Unlimited users at no extra cost
- Uncapped support and training from our team of accountants
- Unlimited software upgrades
- Daily backups
- Full audit trail
- Online knowledge base