Best Use of Thought Leadership
Since 2010/11, councils have experienced a significant erosion of their spending power— with a reduction of over 50% in government funding between 2010/11 and 2020/21. This has led to a notable decline in local services and impacted the ability of councils to deliver critical services such as social care and public transport.
In response to this situation, Grant Thornton launched an innovative, data-driven campaign named Financial Foresight. This initiative wasn’t just a project; it was a movement aimed at equipping both local and central governments with the necessary tools to address the multifaceted challenges posed by austerity, Brexit, COVID-19, and ongoing economic uncertainty. Financial Foresight offers a custom financial trajectory for every council in the nation, charting an alternative path toward sustainable public services. This initiative empowered decision-makers to optimise resource allocation, improve service quality, and navigate the complex financial terrain with greater confidence.
Four questions were at the heart of this work:
- Can we develop forecasts and projections for all councils to show patterns of likely financial failure in the future?
- Are there common and unifying factors in those authorities more likely to fail in the near term?
- Can we identify the demand drivers that are key in creating financial pressures and overspending in the system?
- Can we identify key financial ratios that provide indicators of risk in terms of the financial outlook for individual Councils?
Grant Thornton’s position in the sector—engaging with over 40% of local councils at any one time —positioned us uniquely to understand and address these financial strains. We harnessed our expertise to develop Financial Foresight, a sustained campaign grounded in a robust, data-driven methodology. This approach combined advanced econometric models with sector expertise, providing actionable insights that enabled tailored financial strategies for each council.
Key to this initiative was the collaborative development process. Stakeholder engagement was extensive, involving finance directors, policymakers, and service users. This not only ensured the tool’s analytical rigor but also its practical applicability.
Impacts and Outcomes
The impact of Financial Foresight has been profound and multifaceted. On a micro level, individual councils like Lambeth and Southend-on-Sea benefited from customised insights, which significantly enhanced their financial planning and service delivery capabilities. This support was crucial, helping them to navigate financial challenges and ensuring the sustainability of their services. At a broader level, the initiative influenced government policy and spurred a sector-wide shift toward more sophisticated financial management. It facilitated a deeper understanding of local government finance, contributing to policy debates and reform discussions. Moreover, by enhancing public understanding and fostering greater transparency, Financial Foresight also played a key role in elevating the accountability of councils to their constituents.
Conclusion: A Beacon of Innovation in Public Sector Consultancy
Through Financial Foresight, Grant Thornton not only addressed an immediate need but also set a new standard in public sector consultancy. The initiative demonstrates our commitment to innovation, ability to deliver transformative outcomes, and influential role in shaping the discourse on local government finance.
View the Grant Thornton UK LLP profile in the MCA Members Directory.