Finance and Resource Leadership: The essential lever for Radical Place Leadership

In this article, George Cox and Andrew Laird argue that Radical Place Leadership will not succeed unless finance and resource leadership evolves just as fundamentally as frontline practice and policy.

Many thanks to Nina Philippidis, Simon Parker, Adele Taylor and Rob Powell for their contributions to this article.

Across local government, conversations regarding the right future role for councils are gathering pace.

Leaders increasingly recognise that traditional public service models are struggling to respond to rising demand, declining trust and worsening financial pressures. The case for relational public services and place-based approaches is now widely understood.

Yet one of the most critical dimensions of this shift remains under-explored and under-played.

Radical Place Leadership will not succeed, and councils will not achieve long-term financial sustainability, unless finance and resource leadership and action evolve just as fundamentally as frontline practice and strategic policy.

This is not simply a technical adjustment. It is a profound leadership challenge about how councils understand and respond to demand, risk, investment and their evolving role within the wider system.

Finance leaders can make an impact not just on the process of budget setting - but also on the tone and culture of how a council thinks about investments and use of resources.

The limits of the traditional cost-reduction model

Over the past decade, councils have repeatedly turned to transformation and savings programmes in response to widening budget gaps.

These programmes often focus on familiar levers:

• Becoming more efficient at doing the same thing

• Workforce restructuring and headcount reduction

• Contract renegotiation

• Automation and digitisation (AI powered or not)

• Demand management within individual pathways

Such approaches can deliver short-term savings and efficiencies, and in many cases have kept Councils afloat over the past 10-15 years. They can modernise processes and improve transactional performance - but they rarely alter the underlying drivers of demand, or truly shift finance and resources towards relational or place-based public services.

One of the senior finance professionals we spoke to noted that discussions often centre on efficiency rather than effectiveness – which essentially means (to paraphrase Mark Smith) “doing things better – rather than doing better things”.

In many places, savings are quickly overtaken by rising costs in social care, temporary accommodation, or crisis intervention. The organisation becomes more efficient at delivering services whose demand continues to grow.

The result is a cycle of reform that narrows ambition over time. Each financial year becomes dominated by immediate pressures, leaving little space for more fundamental change. This is exacerbated by the short-term nature of political cycles which makes any kind of patient investment difficult.

Structural funding gaps have become systemic in local government and councils are continually required to find innovative and creative ways to stay within their funding envelopes. If councils are to close structural funding gaps rather than merely manage them, they must shift from improving services in isolation to reshaping the system that generates demand by starting with people and places, not services and siloes.

Reframing the financial challenge through place

Radical Place Leadership offers a different lens.

It begins with a simple but often overlooked reality:

“People do not live their lives through the organisational structures of public services.”

Much of this structure is driven by the way services are funded by central government and are regulated - as a side note it is very positive to see Government reintroducing place-based budget pilots and without doubt devolution will bring opportunities – we will not dwell on these here. We are focusing on what can be done right now.

We know in reality, individuals and families experience interconnected challenges - poverty, health, housing insecurity, loneliness, trauma, which interact over time. Traditional redesign approaches, focused on single service pathways, struggle to grasp this complexity and therefore fail to appreciate or address the earlier signs or the root causes that have led to that demand presenting.

"Much of the demand we see is actually failure demand, driven by how systems are designed, funded and ultimately not working. Without tackling that and the siloes reinforced by current funding models, we won’t deliver sustainable outcomes." Rob Powell, Executive Director for Resources, Warwickshire County Council

A place-based, silo busting perspective should ask:

• Where can community capacity reduce reliance on formal provision?

• Over time, how do multiple services interact - sometimes duplicating or undermining one another?

• What is happening in people’s lives that creates demand?

• Which families and individuals consume the most services, and cost, and what hasn’t happened before the point of this being noticed by the (high costs) on the council and system?

  
  

By understanding demand in this holistic way, councils can begin to:

• Understand patterns and cost of consumption horizontally across the system / organisation instead of vertically - matching the messy lives that people have.

• Strengthen and invest in citizen agency and community resilience.

• Sift activity towards early intervention and prevention that is lower cost and higher impact.

• Reduce failure demand created by fragmented systems.

• Create more sustainable financial trajectories.

  
  

This is not about abandoning efficiency. It is about recognising that efficiency in individual siloes that engage in only a small part of a person’s life alone cannot solve a systemic problem.

Focusing on “growth” and creating an abundance of what matters

Radical reform is often associated with starting new initiatives - but experienced leaders know that sustainable change also depends on the willingness to stop doing things that no longer add value. Over time, public service systems can accumulate programmes, processes and ways of working that fragment effort and absorb scarce leadership capacity and delivery resources.

All of this reduces the abundance of what really matters to people and makes it harder to focus on prevention, collaboration and long-term improvement.

Stopping unnecessary activity is a deliberate and positive leadership choice. Simplifying systems, challenging inherited practices and redirecting resources towards approaches that deliver meaningful outcomes is key.

By thinking in this way, councils can begin to:

• Identify activity that persists out of habit rather than impact.

• Make difficult choices about what to stop to create space for change.

• Reduce duplication and fragmentation across systems.

• Redirect effort towards prevention and long-term outcomes.

• Communicate change clearly to sustain trust and momentum.

  
  

This will create capacity to “grow” the things that will make a real difference to people over the longer term e.g. focusing in on the wider determinants of health, good quality housing, and growing opportunities for people to gain skills and jobs in places they can easily get to. Creating an abundance of this type of support will have a greater impact on demand led budgets/services if given long term funding and time to develop. 

“The very best finance leaders know how to strike the balance between keeping organisations safely within their financial guardrails without stifling opportunities to think about growing the things that really matter over the long term. We know that more money coming into the system from central government isn’t realistic and cutting costs will only go so far. Increasing income only touches a small part of what we do, so what is left is considering who really needs to be supported and how best to do that.  If we support the growth of what really matters to people and the way in which our places and communities work together, it benefits us all.” Adele Taylor, Experienced Interim Finance Director

Why finance leadership is central

In many councils, Radical Place Leadership is seen primarily as a frontline or neighbourhood agenda, contained to embedding relational practice into existing or new services that continue to fight against the traditional systems that are still firmly in place.

This is a mistake.

The planning and budgeting process is where strategy, organisational behaviour and outcomes converge. It shapes priorities, incentives and risk appetite.

If finance systems and the decision-making architecture around resources reinforce departmental silos, short-termism and defensive decision-making, relational working will struggle to take root and flourish - no matter how committed operational leaders may be.

Finance and Resources Directors therefore occupy a uniquely powerful and critical position in unlocking the benefits of Radical Place Leadership. They can either:

• Preserve existing patterns of demand and expenditure, steadily managing decline and becoming a council that is simply a provider of last resort; or

• Enable a shift towards shared system stewardship and long-term sustainability.

The difference lies not only in technical financial management, but in the leadership approach and the renewed decision-making architecture (policies, processes, capabilities and behaviours).

The overarching tone set by finance and resourcing leaders is critical.

From siloed budgeting to collective stewardship

Traditional budgeting encourages services to protect their own allocations. Overspends are framed as service failures rather than system signals.

A relational approach reframes this dynamic.

There is, ultimately, one council budget. Financial sustainability is a collective responsibility. Our conversation with Simon Parker from BANES made this clear:

"The budget setting process is one of the most important leverage points in a council. Finance Directors need to actively champion a whole system view and be prepared to use their personal influence to back the right choices against a system where behaviours are often conditioned for silo-based budget management. The way we talk about money, the things we encourage and support and the way we make decisions about the budget are all hugely powerful cultural signals." Simon Parker, Executive Director of Resources, Bath and North East Somerset Council

When leaders understand and are supported to collectively address pressures in one area that may be driven by failures elsewhere in the system, new possibilities emerge:

• Cross-departmental redesign.

• Joint investment in early intervention and prevention.

• Shared accountability for outcomes.

• An abundance of curiosity and deeper learning around our people and communities.

• More honest conversations about trade-offs.

  
  

Finance leadership can help embed this mindset by structuring planning and budget processes that prioritise transparency, shared learning and collaboration, between departments and with partners and communities.

“Strong organisational and financial cultures are critical to making resource planning work. Finance shouldn’t just keep score, it should help set the agenda, focusing on effectiveness and outcomes, not just efficiency.” Rob Powell, Executive Director for Resources, Warwickshire County Council

Turning budgeting into a relational leadership process

In practice, this means transforming the culture of how financial decisions are made.

Examples from councils adopting this approach include:

• Senior leadership sessions focused on the lived experience and deeper understanding of the consumption and cost of high-demand cohorts across the whole council and wider system.

• Open “fishbowl” discussions where services explain financial pressures and invite challenge. This is an approach Simon Parker also advocates.

• Analysing spend and outcomes through the lens of inequality and place.

• Aligning capital investment with strategies that reduce long-term demand.

  
  

These methods shift the tone of financial planning. Budget setting becomes less about negotiating incremental reductions or growth from departmental demand pressures and more about collectively designing the future system.

Without the leadership and buy-in of finance leaders and professionals, this is impossible.

The benefits are significant:

• Stronger organisational alignment.

• Faster consensus on difficult decisions.

• More creative cross-cutting solutions.

• A clearer connection between financial choices and residents’ lives.

  
  

Mutual Ventures contributed to a policy briefing with Manchester Metropolitan University, Relational Public Services Policy, in which the evidence suggests nationally as well as locally that relational public services are the only option for a financially sustainable system: “Using Government estimates of 363,000 people experiencing severe and multiple disadvantage (at least three of homelessness, mental ill-health, substance misuse and violence and abuse) this would imply reductions in wasteful and duplicative use of resources of approximately £18 billion in England alone.” For a typical council of c200,000, with 1-2% of the population experiencing severe and multiple disadvantage, this could easily add up to £100m of wasteful and duplicative resource. A Radical Place Leadership approach is the only way to achieve anything close to this level of saving, traditional cost saving programmes won’t cut it.

Ultimately (and rightly!), elected politicians must approve budgets, so this approach needs political buy-in. Close working with politicians will be essential to secure up front commitment to a different way of working. The benefits to communities and residents should be clear.  

"Relational, place‑based approaches to finance can work when they are politically sponsored as well as officer‑led. Securing early, shared commitment from Members - while recognising the legal requirement to set a balanced budget - is critical if councils are to make different, more sustainable choices." Nina Philippidis, Deputy Chief Executive & Executive Director of Corporate Resources (S151) at Gloucestershire County Council

Extending relational finance beyond the council

Financial sustainability cannot be achieved by councils acting alone.

Demand is shaped across whole systems - health, policing, housing providers, voluntary organisations and communities themselves.

The next stage of Radical Place Leadership therefore involves widening financial conversations to include partners and citizens.

Over time, this can support:

• Mapping shared high-cost cohorts.

• Aligning investment around neighbourhood outcomes.

• Rebalancing what the council funds directly and what communities or partners lead.

• Building community capability as a core financial strategy.

  
  

This represents a profound shift in how councils understand their role - from primary provider to system steward. This shift is at the heart of Radical Place Leadership and the future of sustainable public services.

The leadership challenge for Finance and Resource Directors

None of this reduces the statutory responsibilities of Finance and Resource Directors.

They must still ensure robust financial governance, credible savings plans and balanced budgets.

However, the nature of stewardship is changing.

Finance leaders increasingly need to:

• Create psychological safety for innovation.

• Support workforce capability for relational practice.

• Develop evidence and decision-making processes for long-term demand reduction.

• Hold the tension between short-term stability and long-term transformation.

In this sense, Finance and Resource Directors become system leaders, not simply financial controllers.

Finance as the decisive lever for sustainability

Whether it is through the lens of local government reorganisation, or simply through the normal course of business, all councils face stark choices. Continuing to pursue incremental efficiencies within existing service models is the easy option as it’s known and relatively simple. Essential as this may be to meet immediate budget pressures, it is unlikely to deliver financially sustainable and better outcomes. Demand will continue to rise and financial pressures will intensify.

Radical Place Leadership supporting by Finance and Resource Directors offers a different path.

By reshaping the relationship between citizens, communities and public services - and by aligning financial leadership and decision-making architecture with this ambition, councils can reduce long-term demand, build thriving communities and strengthen community resilience.

This is not a slogan or a programme. It is a fundamental shift in how local government understands value, risk and leadership.

For Finance and Resource Directors, the implication is clear: The budget is not simply a mechanism for balancing the books. It is one of the most powerful tools available to reshape the system itself.

And in the current context, using that tool differently is not optional.

It is the only viable route to a sustainable future.

George Cox and Andrew Laird