One screamingly obvious way to save public money and to deliver greater value with the money we do spend would be to sort out the incredibly unsexy issue of end year flexibility. This so-called ‘annuality’ issue - where money cannot be carried over from one year to the next – often leads to the wasteful splashing of cash at the end of each financial year. We could quite easily spend less and spend better.
Recently I was at a meeting with a public official who was delighted with himself for avoiding underspend this financial year. Whatever the merits of spin-outs and mutualisation of parts of the public sector, a shift to a more socially entrepreneurial mindset might at least help to reverse this perverse incentive and help financial managers avoid waste, make savings and generate surpluses.
Ironically, for a fund that has helped support this shift, rumour has it that the independent evaluation of the Department of Health’s Social Enterprise Investment Fund (SEIF) is currently being left to rot in a dark room as it may contain some rather dangerous truths.
The fund was originally intended to “generate sufficient returns on its investments to become self-sustaining over the initial fund period”. Does the evaluation reveal that, in the face of annual budgets and the risk of underspend, panicky end of year grant-making compromised and undermined these original noble intentions? We may never know.
If so, this sounds like a typical example of one part of government failing to act in the wider interest. For all the excitement in policy circles for innovation and social innovation to solve our problems, perhaps we should focus a little more on the boring endeavour of getting right what we already do. A more humble admission that we can learn from our mistakes instead of being condemned to repeat them. Can’t we do things well rather than doing what we’ve always done or rushing to fetishise the new?
Can we? Well, the tender for a new fund from the Department for Communities to support social enterprises and voluntary organisations to win and deliver public services says on page 3 "there is no scope to transfer budgets from one year to the next."
Hold the headlines for more scandalous waste.