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by JeanQuille
1954 days ago
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> There is often a culture of cost-cutting in the wider public sector for the purpose of "being seen to be frugal". I've watched people (in their best intentions to be frugal) waste huge amounts of money, through short-sighted attempts to save money through false economies. One hundred percent... we probably all have stories of this that could go on forever! For my part, one of the most costly ways I've seen it manifest is a culture of treating staff time as free in comparison with any expenditure. Getting a purchase—even say a £10 book—is a protracted process that ends up draining hours of multiple peoples' time trying to find and convince a budget holder and get the right forms signed, and even that often doesn't meet with success. It's a double-whammy for wastage because there's not just the gross cost of funding staff doing this, but the opportunity cost of lost productivity on whatever else they would have been working on. |
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1000x this. First it's ignoring the opportunity cost, but there's also the lack of acknowledgement of staffing costs (as they are considered sunken) - the person's pay was already budgeted for, but the £10 book hasn't been budgeted for. Also using up the time of senior (valuable and expensive) people in these kinds of processes. The argument is always that it prevents fraud or corruption, but anyone who knows internal processes would realise that there are far easier (and more lucrative) ways to commit fraud or corruption than the travel expenses system, that would be far harder to detect, and far easier to explain away.
2 more big problems that need solved (one of which alludes to your point):
- Your book is a capital expenditure, but the people administering the kakfa-esque process of approving your expenses are paid as opex. Your department has an Opex budget it aims to spend each year. There's no recognition that "money is money" -- if your budget is for capex, it cannot be used to buy a book! And vice versa! In some organisations (generally handling research grants), money is further ring-fenced into buckets like "Travel & subsistence" and "consumables". Even mid-pandemic, good luck spending money set aside for Travel & subsistance on a consumable, even one arising directly from not being able to travel...
- Annualised accounting, meaning budgets disappear into thin air on the 5th of April, thus driving spend to happen sooner than it needs to, and creating a culture of "spend it or lose it" - the inability for funds to roll over, even when there's a good reason, leads to programmes being pushed to spend more money faster. Letting funding roll over, by allocating budgets as "cash" would be so much more effective.
I hope ARIA will be able to escape from annualised accounting and simply spend its budget, without worrying about capex/opex etc.