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18 February 2011

Public-sector workers splash the cash

It’s spending season in the public sector as workers attempt to use up their budgets by the end of t

By Olly Grender

Sometimes seeing black can make me see red. It’s that time of year, as February races into March, when people look at their budgets, spot an underspend, and scramble like crazy to spend it all before the end of the financial year in April.

Take a look at most budgets in Whitehall, especially those spent on perceived luxuries like marketing, advertising and PR, and the annual spike in expenditure in February and March is clear. Usually, if you didn’t spend up to the full allocated budget then you might jeopardise the following year’s. From central government, to quangos, to the health service, nearly everyone does it.

I’ve heard conversations about year-end surpluses and how they can be quickly spent. Amounts have varied from mere hundreds to tens of thousands.

I can only imagine that an edict has gone out from the Treasury not to spend everything unless it is essential expenditure to allow some money to be clawed back. But true to form, because so many do it, the usual year-end spend frenzy goes on.

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You can hardly blame the public-sector workers. There are rumours that even some ministers cannot resist the urge. A change to this annual tradition requires leadership at the very top; an acceptance that if a public-sector budget is unspent for sensible reasons, that those publicly spirited workers will be rewarded, rather than penalised in the next financial year through their budgets.

We often hear about the NHS reforms being a back-door way of privatising the service. The money that has gone into PR, management consultancy and advertising alone in the NHS’s end-of-year spending blitz has been a significant pay-off to the private sector for years.

But that doesn’t drive to the heart of the problem. Any underspend can be clawed back and allocated to the salary of a nurse, a teacher and a police officer.

So hats off to those public servants who are leaving the underspend, allowing it to be clawed back and spent on the front line instead.

To those public servants who have come in with an underspend and are now desperately looking for ways to spend it, it’s time to think again.