Back in March 2020, Local governments should have revisited their short and long term financial planning – based on different scenarios for infection rates, resource implications and forecasted economic impact on rates and revenue based services.
7 months into the pandemic, councils should be pretty clear on their budget/financial obligations during the crisis and beyond.
Main financial implications would be:
- reduction in revenue generating services
- increase in community support packages
- increase in demand in non-revenue generating services
To continue to deliver essential services, local governments may need further funding. Both councillors and finance officers must have real understanding of the cost to serve on key services and a clear benefits case for investments still continuing.
Zero–based budgeting (ZBB) could be considered – this approach requires all expenses to be justified for each new period.
The process of zero–based budgeting starts from a “zero base,” and every function within an organization is analyzed for its needs and costs.
It could help eliminate non essential, unproductive costs and allow savings to be redirected to more productive areas that will drive future growth.