One Step Beyond: Is the Public Sector Ready to Let Go of Budgeting?
- Publication date
- Publisher
Abstract
There have been numerous attempts at reforming public sector budgeting in recent years, with
most of these attempting to improve efficiency and effectiveness by switching emphasis from inputs
to outputs and outcomes. However, proponents of Beyond Budgeting claim the problems
associated with traditional budgeting systems are such that the solution is not to reform budgeting,
but to abandon it in its traditional form entirely, advocating the need for a more flexible approach
based on the principals of devolved managerial responsibility and adaptive management process.
Before attempting to implement such a fundamental change in approach it is necessary to
determine firstly, whether the organisation is dissatisfied with the current budget system, secondly,
the extent to which the organisation is currently working according to beyond budgeting principles
or has the structures and systems capable of supporting the beyond budgeting philosophy, and
finally, the extent to which the organisation would be in a position to satisfy the preconditions
needed for the successful implementation of beyond budgeting.
The focus of this study is to review the current position of a sample of Irish Local Authorities in
respect of these three questions.
The research targeted twenty two senior and front line managers in three different types of authority
using data gathered in the field by means of a structured questionnaire and a series of semistructured interviews administered in tandem.
The results suggest considerable dissatisfaction with the current budget process suggesting that it
is time consuming , out of touch with reality and largely incremental , but indicate that the structures
and systems currently in place in this area of the public sector are not yet conducive to the
introduction of an approach based on Beyond Budgeting principals. The research indicates that
the biggest obstacle to the introduction of these changes may be a lack of commitment to change
and the unwillingness of management and in particular, the finance function, to loosen central
control over the budget process