2012 ended with a virtual heat wave and was one of the driest on
record… But I can only guess that many Finance teams in local
councils may have missed much of the glorious weather, as they
worked tirelessly to ensure that the necessary transfer of funds to
achieve transition to 'Self Financing' happened without
drama. Year end and 'Self Financing' is no small achievement,
so to them I send my warmest congratulations for a job well
So 'Self Financing' is here, but what now? For many local
authorities the change is welcome and long overdue; allowing them
to retain and use much needed surpluses, planning for the long
term, and even offering them the prospect of building new homes.
However to achieve success in managing large scale debt, a change
in approach to managing performance is also required.
No longer will retrospective analysis of performance suffice. In
future more effort will be needed to provide the decision makers
with data that helps inform business planning, especially when it
relates to income. Business plans will be much more susceptible to
under-performance than in previous times; especially now that the
subsidy system is no longer there to mask such matters.
It is time to get busy assessing what data is helpful and what is
not; however I would suggest the need for caution. Trying to review
organisational data requirements is always fraught with difficulty,
and if approached from the perspective of spring cleaning your data
is also highly likely to fail. It is time to get together key
players to determine what information is needed, and by when.
Think about the decision making process and consider the range of
information which will help project performance, bear in mind that
decisions made in the early years of self-financing are likely to
have long term consequences, and make sure that you get buy-in from
the senior team.
Consider how your data can be manipulated, and how easily it can
be validated. Does the finance system 'talk' to the housing system?
If it doesn't can that be sorted without the need for expensive
Each organisation will be different, every Business Plan is unique
and so information needs will be individual. Most of you will have
a considerable amount of good quality data, so don't be tempted to
throw it out and start again, but do make sure that when required
it will do the job.
Early testing to see if it helps inform decision making is the
order of the day, so get planning and make sure you share good
ideas and practice. Happy Planning.
Download HouseMark's briefing on The
future of performance management post HRA reform, written by
Lorraine and published in January 2012.