Save 3% with No Lost Services

For the last... quite a few... months, the Barnett government has been demanding that each and every one of its agencies will reduce its budget by 3%. By "each and every" I mean, of course, "each and every except for the premier & cabinet and their coteries of sycophantic advisors". Aside from that: each government agency has to reduce its budget by 3%.

So what has been the response, so far?

The response so far has been, a few careful leaks to the media.

Oh yes, says Health, we will cut the number of nurses. No more "agency" nurses. Think how much we will save! Think how much patient care will suffer, trumpet the media. Can't do that, echo the politicians, that could cost us votes. So, Health goes back to the drawing boards.

Do you need new -- lateral -- thinking for your own problems? email nick leth at gmail dot com. Need solutions? No worries. Now.

Oh yes, says Police, we will sell the one boat which protects all of WA from terrorists, poachers and pirates. Think how much we will save, after somehow covering the loss of selling a large, fully equipped, specialist boat in a falling market... You can't do that, trumpet the tame media. Can't do that, echo the politicians, we will be seen to be weak on terrorism. So, Police goes back to the drawing boards.

What is happening now?

Agencies are leaking ideas of cuts that they know will not be acceptable. Cuts that could be political suicide. Cuts that would probably not save anything anyway... Cuts that the politicians are forced to deny, then attack, then refuse.

So agencies are seen to be "trying", trying to find ways to save 3%. When the actual cuts are announced they will be -- in comparison -- not so bad. Some groups of low level public servants will disappear; their work will be done by other low level public servants now expected to work twice as hard. Some mid level public servants will be redeployed; their salaries counted as a budget reduction, their redeployment packages hidden under another budget. A token number of high level public servants will find that their positions have disappeared; they will need to be re-employed as "consultants" with a higher effective salary but under another budget.

And yes, an entire new agency, or at least a branch, will be created -- at exorbitant cost -- to manage the budget reductions. There will be a year or two of high level managers being employed and low level administrators leaving and not being replaced. Then it will all be back to business as usual.

Reduce the budgeting, not the budgets

Look at the process for creating a public service budget:

• Managers are required to produce budget figures, six to twelve months ahead. They direct their staff to create budgets.
• Staff create budgets for their own areas. A lot of it is guesswork... How can you budget accurately when your work may change on the whim of a senior bureaucrat? So, they take last year's figures, add 10% plus some justification; a few "initiatives" are always good. The figures are passed back to the manager.
• The manager agrees with some figures, questions others, refuses a few. It's all subjective: if the manager knew the correct figures, why did they ask others to write them down?
• Staff spend some more time, either randomly cutting dollar values, or writing lengthy justifications.
• The manager makes some more changes, depending on mood, then passes the lot to a secretary.
• The secretary makes it all look neat and tidy. Some errors creep in or stay in, since the secretary does not understand the thinking that led to the budget.
• All this goes to the next manager up the line... who agrees, disagrees, demands changes, etc, etc, etc.
• Finally, some form of budget reaches the top of the agency. (After being chopped and changed. After demands for different figures. etc, etc, etc.)
• The agency budget is now passed to Treasury.
• Treasury -- a group of career public servants who know nothing at all about Education, nor about Health, nor about Welfare, nor about... well, you get the picture... -- this group pick apart the budget figures from each agency.
• The Treasury bean counters (or should that be, Bean Counters?) change some figures, demand some other changes -- and send the budget proposal back to the agency for recalculation.
• And the agency continues to slog through the entire, ludicrous process.

So where is the 3% that I promised?

• Take last year's budget.
• Subtract 3%.
• Pass the new total back to the agency and say, spend that much.
• With one promise: We -- the government & Treasury -- will never waste your time by asking you to explain how you spent that money.

End of story. Read the previous section to find the savings, in time and effort.

Will it really work?

Of course, there are some caveats: How can we make it work? What if the agency really does need more money? What if they are all a bunch of crooks, and steal every penny?

Start with the last: If they are all a bunch of crooks, that will be discovered by auditors. If the auditors are also crooks, see next paragraph.

How can we make it work? First, define "it": "It" is what we -- the public, the government -- require of an agency. So we set measures. If those measures are met then "it" is being done to our satisfaction.

So the government of the day needs to set clear standards for each agency: "This is what we require you to do." For example: Educate every child up to a certain level depending, perhaps, on their innate abilities; Provide a hospital bed for 90% of sick people and home care for the rest; Arrest criminals with enough evidence to convict at least half of those arrested... That sort of thing but with targets that can be both measured and attained.

Set the standards and provide the money. If the senior managers of the agency are not able to provide the services -- hire people who can.

What if they really do need more money?

Good point -- things do change. But for one year, the first year, let's just say that costs should not change very much.

If there are expensive items that need to be bought -- delay the purchase for a year. If the environment has changed -- try to just get by for a year. If you really do need extra staff -- redeploy those now-unwanted budget staff into more productive areas.

Get by for this coming year on last year's budget, less 3%. We will not ask you where the money went. We will just ask that you provide the services that we require.

What if they really, really need more money?

Sometimes, the chief executive will realise that more money is really, really required. The government will provide a 1% increase, on your say-so, on one simple condition: the CEO requests the money and the CEO is sacked. No-one replaces the CEO; the salary and perks remain in the budget. (A bonus for the agency!)

Need another 1% extra in the budget? That'll be another two executives, thank you. 2%? Four executives... And so on.

But, I can hear you say, At this rate, soon all that will be left will be... the people... oh... the people who actually do the work. Oh.

Beautiful, isn't it?!

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