Saturday, September 05, 2009

Hacking our money

We give far too little acknowledgement to the excellent site, Burning our Money, which toils away in the vinyard, coming up with some seriously good material which puts the MSM to shame.

Today Wat Tyler explores the difference between "hacking" and "slicing" – two different mechanisms for cutting expenditure in an organisation (such as the government). Briefly, one can be described as across-the-board cuts while the other is targeted reductions.

The cowardly – and wholly ineffective – way is "hacking". This simply passes the grief (and the decision-making) down the chain, resulting in unintended consequences. And rarely by this mechanism is there achieved any long-term savings.

Tyler's piece has such resonance because I can recall in local government service being on the receiving end of "hacking". Down came the instruction that there was to be a ten percent cut across the board and, since our biggest overhead was salaries, the axe fell mainly on staffing costs. A recruitment "freeze" was immediately instituted, which meant that no vacant posts were filled.

Now, like most hierarchies, our department had at the base of the pyramid the field workers, the inspectors and technicians who actually went out and did the job. They were supervised by senior officers, who in turn were supervised by divisional officers who then reported to the deputy chiefs who were responsible to the chief.

In the nature of things, the most fluid part of the pyramid was the base, where job mobility was high. Higher up the chain, people rarely left – they had high-paid jobs and many would never get an equivalent elsewhere.

Thus, in a very short time, gaps started appearing in the lower ranks. But none of the seniors left. Gradually, the department became unbalanced, with an acute shortage of field staff supervised by a proportionately greater number of senior officers, who of course never went out of the office to get their hands dirty.

As our field staff dwindled, the work stacked up and the complaints from the public about the poor service started flowing in, the bosses came up with the perfect answer. We would target the highest-profile jobs, where we were dealing directly with the public, and deliberately delay our responses by 24-hours.

Under this regime, instead of a same-day call, we would leave it until the next day, then turning up with profuse apologies, blaming the "cuts". It was not long before public pressure became so great that the recruitment ban was lifted and we were back up to strength, the departmental structure unchanged.

Under a "slicing" regime, the obvious solution would have been to get rid of the divisional officers, which would have saved a fortune and improved the efficiency of the department, freeing us from endless red-tape generated just to show the big boss how effective were the middle-men.

But that was never to be. That would have meant structural changes and unpopular decisions. Not even the rank-and-file – with their eyes on eventual promotion and an easier life – wanted them.

And so it is in every public sector department. When the axe is wielded, it always falls at the sharp end. In the NHS, it is the cleaners, the nursing assistants, the doctors and nurses who go. The useless mouths remain. Similarly, in the Army, the bayonets are sheathed while the Colonels and Generals report unfailingly for duty.

"Hacking" is the coward's way out – the easy way - and it never works. But that is what always happens because there are no rewards in public service for taking "tough" decisions. But the next time some bureaucrat "apologises" for poor service and blames the "cuts", you will know better.