OSBORNE scissors

In 2010, the Chancellor opened his Spending Review to suggestions from the entire public sector – today we learn that he is repeating the crowdsourcing effort.

It’s a sensible thing to do. As The Times reports:

‘The chancellor will tell the workers that cuts have so far been achieved by “your dedication, ingenuity and innovation. You know better than most where we can take the next steps,” he says.’

The essence of the approach is trying to bypass empire-building managers. In plenty of organisations (and not just in the public sector) people in senior positions are prone to measure their success by the size of their budgets, not by the efficiency and effectiveness with which they perform their task. Doing the same job with less can be seen as letting the side down, or losing prestige, rather than a success. We see this all the time – consider the number of councils which suddenly build a rash of speedbumps just before the end of the financial year, for fear that if they underspend they might lose some of their budget next year.

Cecil Northcote Parkinson diagnosed this bad habit sixty years ago as “orgmanship”, by which the factors driving the size of an administrative department are largely about the politics of the bureaucracy than about the actual amount of work to be done. Parkinson’s Law has so far proved to be immune to the passage of time.

The result of this culture is that middle and senior managers are not always reliable allies in the fight against waste. Even if they are on-board with what must be done, then they may not be fully acquainted with the real inefficiencies of their organisation.

The people who battle every day with things that waste time and money, though, are further down the tree. The people who know exactly how frustrating it is to use a poorly-designed computer system, who are closely acquainted with which elements of their work are needless duplication and so on are those doing the job themselves. But the opportunities for them to suggest sizeable changes are limited – and there is always the attendant concern that if they do so, they might incur the wrath of a superior who doesn’t appreciate suggestions of how they might slim their empire down.

Going direct to everyone in the public sector inviting suggestions is therefore a sensible way to try to reach people who know the problems well, but would otherwise not be heard.

Why stop at just inviting them to make suggestions for free, though? The quantity and quality of the ideas generated would surely increase if the Chancellor was to offer bounty payments for coming up with ideas that deliver savings – as we suggested in the ConservativeHome manifesto.

The process could be quite straightforward. Anyone making a suggestion or receiving a payment could request and receive a guarantee of anonymity, to protect them against any fear of retribution for rocking the boat. All the ideas would be assessed by the Treasury, as they are now – and if they were adopted then the savings delivered would be monitored over the course of the first year (as I hope they already are…). The originator of the idea would be paid one per cent of the confirmed first year savings up to a limit of, say, £10,000, as a bounty for their service to the taxpayer.

Such a system would almost certainly uncover greater opportunities for savings, and would encourage a more widespread culture in the public sector of staff at all levels scrutinising operations to improve their efficiency. If it failed to generate new savings, then no bounties would be paid and we would be no worse off. What’s not to like?

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