Technical Notes 2026, Issue 12 - Finance Update – Business Critical Spend Protocols
Details
- The purpose of this Technical Note is to continue to highlight that the Council is facing substantial financial pressures and that action is now required to manage expenditure and planned future commitments
- These pressures continue to emerge in-year, as the cost-of-service provision continues to increase. This is due to a variety of demand and economic factors which are set out in the Report to the Council’s Policy & Resources Committee tonight, the 3 February
- As a result of this Report the Council’s Chief Finance Officer has issued a Leadership Information Pack today that sets out the following actions that, if not already, should be implemented with immediate effect
- All Officers are now required to restrict expenditure to only business critical expenditure across all areas of Council business, without exception
- This is a step up from restricting “non-essential” spend (as we have done in previous years) to only “business critical” spend, signifies the magnitude of the financial climate
- As stated above, if not already in place, the implementation of these controls should take place immediately and remain in place until further notice. The following protocols are now in place.
General Financial Management
- All emerging underspends must be conserved and if there is no service imperative to commit resources then spend must be delayed
- Virements will only be approved when they represent a flow of resources from an area where budgets are underspending to areas where budgets are unavoidably overspending. Requests for virements must be submitted to the Chief Finance Officer for approval. In no circumstances are virements acceptable when the objective is to enhance expenditure levels
- To ensure our financial projections are as accurate as possible it is essential that financial administration arrangements for debtors accounts and creditor invoices are processed as quickly as possible
- There must be no unnecessary spend throughout the year or “year-end spend up”. Please ensure that your teams do not purchase furnishings, IT equipment or commit any other non-business critical expenditure. However, if there are any exceptional circumstances then these should be brought to the attention of the appropriate Executive Officer, who will discuss the matter with me.
Employee Cost Control
- Only in exceptional cases is recruitment of/or cover for vacant posts to be progressed – in essence this is a recruitment freeze. Executive Officers should discuss exceptional cases with me, and we will agree whether or not recruitment can proceed. Broadly, exceptions will only be made where there is a business-critical need
- Overtime and additional hours working should only be agreed to cover essential front line service delivery. Executive Officers must ensure that robust authorisation and control measures are in place and must be confident that all overtime worked can be justified and that there are no other more cost-efficient alternative resourcing options available.