Posted tagged ‘under-spend’

There’s nothing as bad as an underspend

February 7, 2012

Spend it, spend it now!

Being a ‘budget manager’ in local government can be a tough job. Some managers just have a few staff to look after and the budget is quite easy. However, at the other end of the spectrum some managers can have incredibly complicated budgets involving contracts, equipment, staff and innumerable other things to consider.

What makes the job even harder is that each manager has to predict at the start of each year how much they are going to spend and getting it wrong can have large consequences.

What confuses some people, including many of those I work for, is that under-spending that budget is just as bad as overspending it.

It is fairly easy to get your head around why an over-spend might be bad thing. The council would have to find money from its reserves or make further cuts to other services to make up for the extra money that you have spent. This would also have an impact on the budgets for the next year and generally put the council in a tricky situation.

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