Three things to consider when doing a budget consultation

Budget Consultation

If you’re a local government organisation, it’s highly likely that you will be required to consult on an annual operating budget with your community and ratepayers.

This is generally to ensure community members support your levels of spending and that they suitably reflect your communities priorities.

Getting budget consultations right can take some perfecting and if done incorrectly can easily get you into strife with your community.

Luckily, there are a few simple things that can easily be learnt and incorporated into your budget consultations to ensure you’re setup for success.

Below we look at three crucial things to consider when planning your next budget consultation.

3 Things to Consider for Budget Consultation

Explain your current budget spending levels in an easily digestible way

Before you can dive into asking your community what they think about your organisations proposed budget spending, you need to spend some time explaining what your current or projected spending actually looks like.

This community learning and education process, is essential for helping people rationalise their thoughts about their own budget priorities.

Breaking down budget spending into easily understandable buckets or groups of money, can help your community better understand where money is being spent and encourage them to think about where they might be able to find savings or how they might spend it differently.

To achieve this, many organisations will use information graphics to better explain budget allocation.

Using information graphics make it easy to quickly look at different levels of spending and helps community to learn more about the costs associated with delivering different services, operations or capital works programs.

Below is an example of breaking down budget spending into different sending areas.

By first distributing your spending into buckets, you will then be able to provide a closer look at total spending amounts by further revealing the amount spent on each area.

In the example below from Victoria Park in Western Australia you can see a good example of communicating budget and service level spending.

Not only do they utilise information graphics to highlight spending buckets, but they go even further to outline which spending is legislated, which is discretional spending and also the incorporated employment costs associated with the levels of spending.

Another useful device to use is to include a simplified measure of spending, such as how many dollars per $100 is spent for each priority area.

Providing budget information in a digestible way such as this is crucial if you are going to set your budget consultation up for success.

Ask community about their budget priorities

Once you have explained your current levels of spending and allowed your community time to digest the information you should then begin your consultation by making inquiry into your communities spending priorities for the coming financial year.

There are many ways to do this including;

  • Starting a discussion forum with targeted discussions about areas of spending
  • Surveying your community about their spending priorities
  • Setting your community a challenge using ideation tools and asking them “how might we better control budget spending…”
  • Use a series of quick poll questions to test communities views about each spending bucket
  • Go offline and collect community priorities at pop-up events and public meetings.

This is an essential part of consulting on a budget consultation as this is where you are seeking to align you organisations ideas about the upcoming budget against your communities views.

At this stage, some organisations might also publish their intention to raise rates in order to maintain spending on essential services and complete new capital intensive projects.

It’s important if you are going to signal that you might be considering a rate increase, to reiterate the importance of community input in developing your draft consultations.

You should always try your best not to predict what the community will want. Selecting priorities for spending is a subjective process and should be taken onboard as part of a bigger picture understanding of your spending commitments.

Explain the impact of increased spending in real terms

If you find yourself in a situation where you are proposing to increase spending and as a result potentially increasing the rates for taxpayers, it’s absolutely essential that you explain the “real” impact of a potential rate increase.

While there might be specific guidelines from regulators that determine how rate increases must be reported, there will still be many different opportunities to explain the impact on the individual of the increase.

For example, if annual rates cost $2000 dollars and you’re proposing to increase rates by 5% to cover the costs of increase spending, it’s far better to explain the impact of 5% rather than simply leading with the percentage on it’s own.

Instead of saying “rates need to increase by 5% in order to deliver the budget” you could instead say “the impact of our increased spending on community services and infrastructure is equivalent to $1.90 per week for rate payers.” ($2000 x 0.05) / (52 weeks)

By simplifying the way you talk about the impact of any potential rate increases you can help get support for your budget and also make it easier for your community to understand the real impact of the changes on their hip-pocket.

Published Date: 14 February 2018 Last modified on September 7, 2018

See how activates your community. Request a demo