Paying Peter to Stop Paying Paul

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"Private firms to find public sector cuts" says the headline in The West today (4 Sep 09). What a great idea, spend a heap of money on consultants to make meaningless cuts in the public service. Here's how it works:

1. Government tells Police to cut 3%.
   
2. Police offer cuts which will either (a) visibly reduce the effectiveness of practical policing, or (b) threaten public safety. The examples of (a) were a couple of months ago. The latest example of (b) was the decision to do high speed car driver training on public roads.
   
3. Public are horrified at (a) the possible rise in unsolved crime, or (b) the threat to public safety.
   
4. Government recognises possible loss of votes and is forced to back down on budget cut demands. Possibly to be followed by,
   
5. Police cut a few areas that they had already wanted to dump.
   
6. Government accepts the token gesture towards savings.
   
7. Police get the money back by showing justification for extra funding in other high public profile areas.
   
8. Accountants demonstrate savings "in identified areas", government publicises savings, total budget is the same or higher.

The demands for 3% budget cuts have several failings:

• The cuts are initiated by accountants who do not understand the business.
  
• Actual cuts can only be substantiated by accountants, who do not understand the business.
  
• People who actually understand the business are too busy "doing" -- policing, treating, teaching, etc -- to waste their own time looking for costs to cut.
  
• The obvious source of savings is to cut unneccessary services.
  
• No-one has actually defined the necessary services from any government agency. So no-one knows what is not necessary.
  
• So agency accountants are left to squabble with Treasury accountants who want to look good with government ministers who have passed the buck to external consultants. Who know even less about the business, so will make even more nonsensical cuts to possibly essential services.

Realistic Step One

Define the actual government requirements of an agency. (More on that in a later post.)

Realistic Step Two

Cut costs in areas which are not required by the government.

Independent thinking & independent analysis of your problems by Agamedes Consulting. Support for your thought: email nick leth at gmail dot com