Ed Balls has just been on Radio 4 talking about a future Labour Government's plans to enter office with a commitment to Zero Base Budgeting (ZBB). The concept of ZBB is straightforward: instead of building budgets in an incremental way (this year's budget plus 5% say) or in a decremental way (aka cutting 5% say), the ZBB approach builds up budgets from first principles. In other words ZBB asked the question if we were starting again, with what would we need to start?
ZBB makes the argument that all existing budgets have embedded assumptions which often cost a lot of money. The practice continues that by challenging these assumptions and asking a genuinely open question, what resources do we need to achieve the outcomes we desire, not only will new budgets be considerably less but also radically new (and more efficient) ways will be found to achieve outcomes.
It is good in theory and often in practice (though not always). It has been used widely over many years in many commercial and public organisations. Here is the Wikipedia entry and another article from the Canadian Government describing its pros and cons.
It is not a process for the faint hearted. It does require considerable resource and nerve to make it work as well and deeply as it needs to do in order to achieve its goals. It is arguable whether ZBB can be made to apply to public sector budgets given all the constraints not least a legion of legislative regulations and the fact that essential public services are just that.
However, the principle is a good one and does indicate some radical thinking in the Shadow Treasury Team.
Why am I blogging about this here?
Perhaps Labour PCCs should be considering adopting a similar campaign commitment?
(You may wish to contrast this with Cllr Anthony Stansfeld, Tory PCC candidate for Thames Valley who is on record on Conservative Home for saying "If elected, I don't think there are going to be any great changes in policing.")
Also I created these simple graphics the other day to highlight the problems with many existing approaches to decremental budgeting...
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