The Daily Mail has reported that a quango (UK Trade and Investment) was asked to spend £1m, so that the Foreign Office (FCO) could keep its budget for the next year (and it does genuinely grieve me to agree with the Mail ..)
So why wouldn’t the Foreign Office want to reduce its costs, at a time when the nation is being told to “tighten our belts” ? Why couldn’t this money be used to help fund higher education ?
Well, it really shouldn’t come as any surprise to anyone that this goes on – it’s a result of the dysfunctional way in which government accounting operates. Not just in the UK, but (I’m sure) in other bureaucracies (including large organisations).
Empire building
At the heart of this is the way in which managers in these organisations are rewarded. One such structure is the “Hay-MSL” evaluation mechanism (which was used where I used to work). The more points you have, the more important your job, and the more you get paid.
This sort of system is really useful, because it makes it easy for HR teams to pass responsibility …
So how do you get points ? Well, the easy ways are to employ more people or be responsible for a bigger budget. Shouldn’t your boss pick up the fact that you’re padding the budget ? Well, maybe, but his budget is bigger because it includes yours. so his job is more important as well. So he gets more points, and more money.
So the net effect is that the system actually works to promote people who are good at empire-building, rather than those who perform effectively and efficiently.
And the mandarins will try their best to make sure that the spending cuts take effect outside their bailiwicks (aka areas of budgetary responsibility).
No surprises
The second factor is a culture that values managers who “meet expectations”.
If they spend their budget (ideally to the penny) then that’s evidence that they’re really good at setting and/or managing budgets.
So spending to meet your departmental budget helps you to demonstrate that you can do your job (and really, probably, deserve a bonus).
I’m sure there will be more examples …
See First .. 