Tips on budget and precept setting, from Scribe Accounts 10/10/2022

The budget represents the future spending plan for the community, read Scribe’s tips on budget and precept setting.

For Local Councils, the budget represents the future spending plan for the community and provides financial accountability. Read Scribe’s tips on setting the budget and precept below, and where to get more help.

5 top tips to help you through the process

  1. 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.
  2. Forecast – 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.
  3. 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.
  4. 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).
  5. 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.

More resources from Scribe

If you want further help or details on budget setting, Scribe has some useful resources here:

Scribe also has some free webinars on ‘Budgeting and Forecasting in Uncertain Times for Town and Parish Councils’ which can be found here on October 20th and November 9th.

Further help

Our Knowledge Bank has more information on setting your budget and precept, along with some things you may particularly want to consider this year such as the cost of holding an election in 2023, increased insurance and staffing costs, and utility costs (read guidance here from Clear Utility Solutions on the government help for utility costs)

Member councils can also access our range of finance training which includes courses on Budgeting for Clerks and Finance Staff, and Finance for Councillors (which includes budgets and precepts)