Case Study: Islington Saves £3m With Budgeting And Forecasting Solution

While facing government funding cuts and budget pressures, Islington Council was able to make significant costs savings by implementing a budgeting and planning solution.

Islington is the third smallest local authority in London and the council covers just over six square miles and a population of around 215,000.

Although small, the borough is one of the most deprived in England and much of its finances are needed to support children and adult social care services.

The Business Problem

In 2010, the government imposed restrictions that required Islington to reduce its controllable spend by 35%.

This savings figure was equal to £112m over a four year period, much larger than the proportion of the authority’s budget used for protecting frontline services.

While the council was able to recognise urgent action was required, its manual processes were convoluted, meaning an accurate interpretation of its financial position and ability to make informed decisions was hindered.

Islington was using a number of Excel spreadsheets to record vital information and this make it very difficult to gather accurate forecasting information within a reasonable timescale.

“Our finance function was devolved and departmental support and corporate finance teams had to report directly to the financial director,” explained director of financial management at the local authority Alan Layton.

“A large proportion of time each month was consumed by inputting financial forecast into Excel spreadsheets. They then had to be cascaded throughout the organisation before a true financial picture could be established.

“Due to the complexity and high volumes of manual consolidation involved there was a high risk of error stemming from inaccurate data. Clearly we needed to review our process and adopt a robust and user friendly solution which would allow us to better understand our data in many more ways,” he added.

Solving The Problem

After looking at a number of budgeting and forecasting systems such as an automated Excel-based application, Islington discovered Collaborative Planning, a solution by Advanced Business Solutions.

It decided to opt for this cloud-based product, which was then built, tested and implemented in a five month period before being rolled out in a phased approach to each council department.

Collaborative Planning was fully live at the local authority in November 2009.

“[The system] far exceeded the functionality of the Excel-based system we considered and crucially integrated into the general ledger within our accounting system, also provided by Advanced,” said Layton.

“The consistent look and feel throughout ensured all departments quickly embraced the system as it is simple to analyse financial information in a clear, standardised format,” he added.

Initially, Islington opted for monthly forecasting but moved to capital programme forecasting and detailed budget setting.

A key factor offered by Advanced was the ability to streamline processes and encourage managers to take ownership by requiring them to approve and submit forecast within a unified system to increase budgetary transparency and control.

“Cultural change can be the biggest obstacle to delivering the benefits of a modern finance function in the public sector,” claimed Layton.

“We were able to secure management buy-in from the highest level which resulted in a very successful implementation and subsequent roll out,” he added.

Results

Advanced Collaborative Planning is now used by over 500 members of staff at Islington to monitor revenue and budget setting.

Users are able to pre-populate financial forecasts to focus on any exceptions or anomalies, making it easier and quicker to determine where efficiency savings can be made.

Since scrapping spreadsheets and implementing Advanced’s solution, the local authority has been able to automate its entire financial monitoring process, allowing it to access and analyse information in real-time.

Data entry errors are now mostly eliminated and so financial integrity is both comprehensive and reliable throughout the budgeting cycle.

“Collaborative Planning has eliminated various labour intensive processes, which will enable us to reduce our core finance costs by 40%, amounting to over £3m,” claimed Layton.

“We can now quickly produce reliable monthly forecasting information, with minimal effort and maintain tight control of our budgets to protect vital frontline services.

“The finance team is also freed-up to place a greater emphasis on providing advice and strategic planning, rather than spend an insubordinate amount of time on nuts and bolts financial monitoring, to drive out the ongoing savings we need to make,” he added.

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