The Public Sector Reform Policy and Accountability Committee received an overview of the Finance and Corporate Services Directorate's responsibilities, budget, and future plans. The committee also heard a presentation on preventative investment, exploring how councils can define, map, and measure their spending in this area.

Finance and Corporate Services Overview

The Finance and Corporate Services Directorate presented an overview of its extensive responsibilities, which span a net budget of £58 million and involve managing £800 million in council-wide revenue and expenditure. Key services include the Finance team, which oversees the council's finances, and the Procurement team, which manages approximately 4,300 contracts annually. The Directorate also runs digital advertising sites generating £2.7 million in income and manages the council's website, which receives 3 million visits annually. Other services include the contact centre, which handles around 230,000 calls per year, and legal services.

The Directorate's vision and strategy are focused on delivering exceptional front-line services and back-office functions, ensuring effective and efficient governance, and protecting data and systems from external threats. The presentation highlighted the council's financial performance, noting that it has maintained low council tax and generated significant efficiencies. However, future challenges were identified, including the impact of the government's Fair Funding Review, which is expected to lead to financial pressures. The Directorate is updating its Medium Term Financial Strategy to address these challenges.

The 2026/27 budget for the Finance and Corporate Services Directorate totals £41.3 million net. Significant investments include £15 million for Digital Services, which covers staffing and IT infrastructure. Budget movements between 2025/26 and 2026/27 include savings of £627,000, inflation adjustments of £357,000 for contracts, and a £2.3 million increase due to the centralisation of legal budgets. An investment of £345,000 was allocated to Digital Services for Office 365 licensing costs and cybersecurity enhancements.

Risks identified include continued pressure on public finances due to inflation, interest rates, and unemployment, as well as specific service pressures on adult and children's social care, transport, and homelessness. IT systems remain a risk, with ongoing cyber security threats. Opportunities include maximizing business rates and council tax collection, establishing a joint venture recruitment company, and enhancing cybersecurity defences following a previous incident.

Preventative Investment

Zachary Scott, Policy Researcher for Prevention at the Chartered Institute of Public Finance and Accountancy (CIPFA), presented the report 'Understanding Preventative Investment,' co-authored with The Health Foundation. The report advocates for a shift towards a preventative approach in public services to increase community resilience and reduce future demand.

Scott explained that defining and measuring preventative investment is challenging but crucial for effective financial decision-making. CIPFA's four-step approach involves:

1. Setting the scope: Defining the area of focus for the analysis.
2. Mapping services: Identifying all services within that scope.
3. Classifying services: Categorising services as preventative, enabling, or non-preventative, and assigning a stage of prevention (primordial, primary, secondary, or tertiary).
4. Collecting financial information: Linking services to their associated expenditure.

Case studies from the London Borough of Merton, Three Rivers District Council, Wigan Metropolitan Borough Council, and Rhondda Cynon Taf County Borough Council demonstrated the application of this approach. These case studies highlighted the importance of clear definitions, collaboration between finance and service teams, and embedding prevention into organisational strategies.

Key lessons learned include that prevention can be quantified, finance professionals are essential to the process, mapping builds shared understanding, and prevention gains traction when integrated into strategy. The report recommends that public sector organisations consistently map and measure preventative investment, analyse demand drivers alongside financial data, and embed prevention into organisational priorities and governance. It also calls on the UK government to make prevention a whole-of-government priority, develop a national picture of preventative investment, and align accountability and budget processes with long-term outcomes.

Councillor Harry Brackley, Chair of the Public Sector Reform Policy and Accountability Committee, noted that the committee's draft work programme for 2026/27 would include discussions on transformation programmes, digitalisation, and research capacity, which align with the themes discussed.