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June 3, 2006
Accountancy, accountability and democracy
Over the 8 years during which I have studied local authorities and the library service I have been genuinely surprised at the management reporting of the expenditure of money. Readers of this blog will have noticed in only the past few weeks:
Buckinghamshire County Council's document advising why they proposed to close 8 libraries failed to account for £4m of annual expenditure
Dorset County Council propose to close one third of their 39 libraries when they have been asked to find a saving of just 3.5% of their annual expenditure, and
Devon County Council, when asked to show the calculation of why the twelve libraries they plan to close, were selected, were completely unable to do so.
If you read my report "Who's in Charge?" you will find that Councillors in Hampshire County Council have no way of distinguishing the operating cost of its libraries from the enormous "back room costs" that are incurred.
I have seen this pattern repeated in every single council which I have studied: there is no understanding of the idea of notions such as an "overhead" cost," or "productivity" and neither councillors nor senior managers are ever, in my experience, given clear, regular, consistent explanations of how money is spent and why, nor do they demand them. Each of these library services is a very substantial financial operation yet none of them operate management accountancy in a way that would help them seek improvement. They have never been trained to do this and are unfamiliar with what it means.
At the same time The Audit Commission, who are the body responsible for ensuring financial probity of local government, make no attempt, through all their activities to correct this situation, nor do they appear to notice how grave it is. These shortcomings give little faith in the idea of democracy where nearly half the money in the country is managed by these and similar organisations.
Posted by Perkins at June 3, 2006 5:04 PM