Setting the precept for the year ahead is an essential task for Town, Parish & Community Councils across the UK...and a pretty big one too! By mapping out the future spending plan of the community, you can ensure that resources are allocated wisely and effectively, demonstrating your Council's commitment to financial transparency and accountability.
It's an opportunity to shape the direction and priorities of the community with clarity and openness, so it's important that you dedicate enough time to the process. Here are my 5 top tips for precept budget setting....
⏳ Schedule time
Budgeting is an important task and requires dedicated time. Work back from your scheduled budget meetings to determine when you should begin prepping. Try to delegate tasks where possible, involving committees or departments and setting clear deadlines for them.
Predict future income and expenditure to result in your likely end of year position and in turn assist with setting the precept for the following financial year. You should forecast to complete calendar months and remember to be realistic. If you are expecting to come well over or under budget, this should be what your forecast shows.
🗑️ Don’t be afraid to start again
Zero-based budgeting involves starting from scratch and ignoring previous budgets. This may be necessary where the current budget is not fit for purpose (e.g. lacking in detail, inaccurate, vastly different to actuals). It can also be used for specific projects or new elements of the budget where no previous data is available.
📝 Make notes
Keep a record of how you came to your calculations, especially for estimated budget lines and those that have changed considerably. This is a great help if questions arise or for you to refer to at a later date. You should also keep notes of changes to the budget and one-off, unexpected costs throughout the year (particularly useful for your explanation of variances at year end).
👀 Monitor the budget
The budget process is not just about setting the precept, it should be seen as a continuous process to assist in monitoring the current financial position of the council. Determining any areas of over/underspend throughout the year allows you to take necessary corrective action, like drawing down from reserves.
If you're new to the budgeting process or would like a recap, we've got plenty of useful resources for you!
💻 Free Webinars
Friday 6th Oct, 11am Forecasting, Budgeting & Setting the Precept for Local Councils
Thursday 16th Nov, 11am Forecasting, Budgeting & Setting the Precept for Local Councils