Waste in schools

[Hugh Spencer]

Years ago I was appointed to various schools on a temporary basis. Heads were allocated a certain amount of money to run the school for the coming year. If a head wished to save some of it to purchase an expensive piece of equipment the following year he was told that his next allocation would be smaller by that amount so they made sure they spent all their capitation allowance each year. At one school the head, somehow, had bought an electronic organ which, when he left, was put into storage and not used. It could have been retrieved by the County authorities and issued to other schools who could make use of it. I hope this system is not being followed today.

[New Judge]

There is an enormous problem with annual budgets in publicly funded bodies (and, it has to be said, in some of the larger private concerns). There is this notion that the entire budget has to be spent for fear, as you describe, of the sum being cut the following year.

This leads to ridiculous situations around February to March time, where managers desperately panic to spend their allocation before the end of the financial year. Somebody I know works for a local authority in an office job. He and about a hundred of his colleagues were all provided with an overcoat and boots at the end of the winter a couple of years ago. The reasoning was “in case they need to go out on council business” but in reality it was to spend the remainder of the budget.

Budget bids should be pitched to meet the running costs of the business. If there are one-off purchases necessary a business case supporting the need should be presented and a decision taken whether to provide the funds. The following year a fresh bid should be made obviously without the one-off item included.

It’s straightforward simple business procedure and one which most businesses follow.

[jake-the-peg]

This is not a factor of public organisations it;s one in private companies too.

I've seen it in many organisations in which I've worked.

If people come in under budget they're afraid of being accused of padding their budget requests.

[New Judge]

You're quite right, jake. As I suggested it is not a feature exclusive to public bodies, but public bodies are almost all guilty of it, whereas in private concerns it is less prevalent.

[jake-the-peg]

I haven't found it less prevalent in private businesses

[chakka35]

That it happens in private companies is not a concern of ours unless you are a shareholder in one.
But when it happens it public departments, which it most certainly does and very often, then it is a sheer waste of taxpayers money. Perhaps this could form part of the cost-cutting that all parties recognise is necessary.

[cc1]

I think most schools are allowed a percentage carry-over without penalty. What used to infuriate me was the system whereby all purchases had to go through official suppliers. I wanted to buy for my Maths Department sets of calculators on offer at a store like Staples or somewhere, but I couldn't do it, I had to pay almost £1.50 each extra to buy from a catalogue. Obviously, I couldn't be trusted.

[jake-the-peg]

That's not the point Chakka

The point is that if it commonly happens in both private and public enterprises it's a very typical behavior and not the sort of thing that it's realistic to expect to simply change.

You might as well say that It's no concern of ours that private companies lose some of their best people to competitors we should not expect it in the public sector

[chakka35]

jake, it is not like you to be so illogical.

That private companies lose money for their shareholders by a stupid practice is their own affair, That public bodies lose my money by stupid practices is mine, and I am entitled to protest.

The solution is simple: tell all departments that they will not be penalised if they underspend in a particular year but will be congratulated on saving Chakka's money. Then their subsequent year's budget will be considered afresh as a totally separate exercise.

[New Judge]

Jake’s logic has some merit, but does not bear too close an examination.

There are many practices (some good, some bad) common to both private business and public bodies. However, there are some where public bodies deliberately set themselves apart (I almost said “above”) private enterprise. In particular I can think of tendering processes (where public bodies often set their own agenda and force potential suppliers to comply with various ideals – not necessarily related to the business in hand - if they want their tenders to be considered).

Tendering without these considerations is widespread in private business and so can be considered “typical behaviour”. Nonetheless public authorities take it on themselves to modify that behaviour when it comes to their business dealings. So they can and do depart from such “typical behaviour” (and by their actions expect others to do so) when it suits them.

However, that is not the point. As has been said, what private businesses do with their funds is up to the directors and shareholders (and I would dispute that waste, duplication, profligacy and generosity is as widespread in the private sector). What public bodies do is very much every taxpayer’s business. With particular reference to this question the education budget is the third largest of the government’s expenditure behind social security and health. Its cost has increased enormously in the last ten years with no appreciable increase in results (and I mean real results, not exam results). It needs to be run more efficiently and that would probably be best achieved by removing it from State control and certainly from local authority control.

[saxy_jag]

It's certainly the case across our local authority, Hugh, not just in schools. If we have any money left uncommitted towards the end of the financial year, the authority can cut it and allocate the money to another department/service, as well as cut the budget the following year because you clearly don't need the full allocation (according to them). A local concert hall has become overspent over the past few years to the tune of £1.4m, which we're now all having to pay for and our 09-10 budgets were severely cut back before Christmas - we're having to lose a number of staff because of it. Our head of service has now advised managers to get the budgets fully committed as soon as possible this year so that the money can't be taken away from us yet again. Whilst it makes us plan things much more carefully, it leaves us no room for unforeseen contingencies and it makes us very angry to think that we have to lose out in this way, bailing out those who can't manage their budgets, when we've managed our own very well - too well, it would seem.