Sunday 10 December 2017

Budgeting Tips from Michelangelo

“Every block of stone has statue inside it and it is the task of the sculptor to discover it.  I saw the angel in the marble and carved until I set him free”

Michelangelo di Lodovico Buonarroti Simoni (1475-1564)


The most famous sculptor of all time, Michelangelo, must have known a thing or two about long-term planning.  His works of art often took many months or years to accomplish and were feats of craft as well as works of art.  His thoughts on the subject confirm – as we must surely have known- that sculpting a piece of stone is not a matter of hacking bits off piecemeal in the hope that the result sort of works, but that the artist’s vision coupled with the physical realities of the material are both crucial parts of the process. 

Similarly, there are two ways of tackling a local authority budget in an era of austerity.   Either you can do the incremental hacking, reducing the size of the budget year on year but trying to keep it more or less the same shape,  or you can try and ‘see the angel in the marble’ and reshape the budget over time to create something new and maybe even better.   Not many people would dispute that the second approach is preferable.

It’s not just a question of the budget, of course.   The budget is nothing more than a financial model of the organisation, encapsulating the outcomes you want to deliver and the allocation of resources over time which, if properly managed, will accomplish those outcomes.    As an aside (although really it’s a subject for another piece) it is surprising how often you find that the budget does not model the organisation.  If the same bits of the budget overspend or underspend year after year, that’s a sign that the budget and the real world are out of alignment.   When that happens then either the budget or the delivery model needs to change. 

If a budget is a model of the outcomes expressed through resource allocation then there are three bits every budget process needs to consider.  Essentiallly;

-                What are the outcomes we want to achieve?
-                What is the delivery model that will get out to those outcomes?
-                How shall we allocate resources to achieve the delivery model?

In an organisation with ample funding, this is the order you would logically always do it.

Every planning process starts from ‘now’  - the shape of the block of marble you see in front of you.   Michelangelo would not have been able to get his seventeen foot high statue of David out of a six foot cube however hard he tried.  Even the best have to accept their limitations.

Where to start is a matter of choice: although experience may tell a good sculptor to begin in one place or another.   For most local authorities, after seven years of funding cuts,  the availability of money is the limiting factor, so it might make sense to  start with the budget – as long as you are confident the budget does in fact model reality.  Alternatively – as many authorities are now doing – you could start with the outcomes, throw away all assumptions about the delivery model, and work out what’s the best way forward, ending up with a budget that expresses a new paradigm.   The practical difficulty with this is that the existing delivery model can be hard or expensive to change.   Often the choice of approach is a matter of what works politically.  Whichever corner of the block you chisel at first, the result should be the same, as long as budget, delivery and outcomes are all part of the process.

Whatever way you go it is clearly the wrong approach to keep hacking away without first visualising the angel in the marble. 





Monday 17 April 2017

Joseph Chamberlain meets Tammany Hall


Joseph Chamberlain is the embodiment of 19th Century municipalism and his name is often cited as an example to modern localists. As such he needs no introduction. 

In November 1897, at the height of his political career, Chamberlain accepted the freedom of the city of Glasgow and took the opportunity to set out some of his views on local government.  His speech, as reported in the Glasgow Herald, is provided below in full and underlines, if nothing else, that there are few debates new in local government.   Perhaps his most interesting comments which have some resonance today reflect on staff pay. 

No other commentary is necessary, except to say, by way of context, that Chamberlain refers to the first elections for the Mayor and Council of the newly amalgamated five Boroughs of New York City which had taken place the previous week, and which had been a sweeping victory for the Democratic Party political machine and for the Tammany Hall candidate for Mayor, Robert A Van Wyck.  What followed was a national battle between the political machine and reforming progressives, fighting for more democratic values.   As to who won that one, as Chou En Lai might have said, it is too early to say.

------

Joseph Chamberlain to the Corporation of the city of Glasgow, City Chambers, 8th November 1897

“My Lord Provost, ladies and gentlemen. I am extremely grateful to you for the kindly terms in which you have proposed this toast.  It is very easy for me to repeat once more my deep sense of the compliment that has been paid to me today,  and to thank you and all concerned for the manner in which it has been carried out.   But when you ask me to go further and ask me to make two non-political speeches on the same day – (laughter)-   I am sure I shall have your unfeigned sympathy.  Because, after all, if I am anything I am a politician, and to ask a politician to speak and to say nothing about politics is something like asking the Israelites to make bricks without straw. (Laughter).   However, I am inclined to think that the objection to politics on the part of the Glasgow Corporation is one that it is difficult to sustain. (Applause). My learned colleagues of the university will tell you whether I am right, but I think that it is Aristotle who defines politics to be everything which concerns the happiness and good government of the City or State.  If so I think that it will be very difficult indeed for the Glasgow Corporation to prove that it is not an intensely political body.  (Applause).

Sir, I do not think any of us need to be ashamed of being political in that sense, at any rate, and I entirely sympathise with what has fallen from the Lord Provost.  I believe that those who desire to do anything to make better and happier the lives of those around them will find no better opportunity, no better channel through which to secure this result than municipal and local government.  It is through local institutions,- which themselves, no doubt, have been created and sustained by Parliamentary legislation-  it is through the operation of these municipal institutions that after all the greatest practical advantage has accrued to the masses of the people.

Well, we are all well pleased with ourselves in regard to our local institutions in Great Britain,  and I think we have some right to be conceited.   But I ask myself sometimes whether we are entitled to assume that the present state of things is permanent, and whether there are any signs of deterioration, whether it is possible that these institutions may yet be worked to our harm. I am sometimes inclined to ask a question of that sort when we think of the result of a great election, an election to a local institution on the other side of the water.  There in the metropolis, as we may call it, at all events of the greatest city of the United States of America, full of an educated, cultivated, patriotic people, we find, according to American evidence, that the government of nearly two millions of people has been handed over for three years to an institution whose object avowedly is to get the greatest amount of the spoils.  That is a most terrible result,  and it is worth enquiring whether the possibility exists in regard to our own institutions and what are the principles we must hold if we desire to avoid such a result.

Now, I find that the explanations given do not seem to me altogether satisfactory.  It is said that in New York there is a mixed population.  It is quite true that New York, I believe, possesses a larger German population than exists in any German city, except Berlin;  a larger Irish population than exists in any Irish city except Dublin;  a larger Italian and Scandinavian population than exists in all Scandinavian and Italian cities except those of the very first importance.  But that is not sufficient to account for the state of things we are considering.  Many of these strangers, to which the United States has opened its arms with so much generosity, welcoming them to the franchise perhaps a little before they were prepared for it,  many of them are not at all likely to lend themselves to anything of the nature of corrupt administration- the Germans especially.  I could give one instance where they make most admirable citizens.   With ourselves, in many of our larger towns, we have a mixed population,  and therefore there is nothing sufficiently distinctive in regard to the rest to justify us in coming to the conclusion that that is the cause of that great difficulty.

Then it is said that politics are introduced into American corporate life.  That is true, but it requires some explanation.  In the ordinary sense of the word that would not in the least account for what we are discussing,  because politics do not enter in the usual sense of the word into municipal elections in any of the American cities.  This last election was conducted by what may be considered as an independent political organisation existing outside the regular parties in the State.   As you know, in many of our great cities – Birmingham and Liverpool – their municipal elections are conducted upon political issues.  But I believe that the whole source of the weakness lies in the state of things, in the system of administration,  rather than with anything connected with outside political considerations,  and also in a public opinion which tolerates that system of administration.  

I believe that the success of our system here and the failure of the American system is to be found in the different ways in which we treat officials.  Now, by officials I mean everyone who is employed by a Corporation.  There are, in the first place, the higher officials.  When Corporations undertake such business as is now conducted by the great municipalities of England and Scotland,  their higher officials, men [sic] who are entrusted with the management of departments,  with the control of great manufacturing concerns, or with complicated systems of finance, they must be men of special capacity,  special ability, or else there will be inefficient administration and great waste of public money.  You must have, and you can afford to have, the very best men in their respective capacities. (Hear, hear). But if you have such men, three things are necessary.  They must be irremovable, except for some gross and proved offence;  in the next place, they must be selected originally for their merits, absolutely without regard to their political opinions -(hear, hear) – and in the third place, they must be paid the market price for their services. 

Now, I myself believe that as regards the two first of these conditions they would be universally agreed to; but I have seen in some quarters – notably I recollect a speech made by Mr Burns,  the very able and estimable Labour representative for the Battersea Division -  I believe it was Mr Burns, but at any rate it was a Labour representative- in which he said nobody was worth more than £500 a year.  Well, if any idea of that kind ever prevails in the administration of our great Corporations, I warn those who are most interested in their success, and that is the working classes of the country, that inevitably they will fail.  (Applause).  It may perhaps be a natural thing for the working man who is the employer to say that he cannot understand why his servants get a higher rate of payment than he gets himself.  But he should remember that he is not only an employer, but he is shareholder,  and that if we wants a dividend he had better take care that the manager is well paid. 

There is another danger which, I think, is even more serious than any want of consideration for the higher officials and that is, if the higher officials may occasionally be paid less than the market wages,  there is a great fear that the lower officials should be paid more than the market value.  (Applause).  Now, that is a real danger.  There is an idea growing up in the minds of a certain section of the working class of this country that when a man becomes a public servant – a workman, that is to say, employed by a public Corporation – he is to have better pay than his fellow-workman doing precisely the same work under a private individual.  I protest against that doctrine.  (Loud applause).   I say, speaking with all my experience,  it is fatal to good municipal government, fatal to efficiency,  fatal to the ultimate success of the institution which we now regard with so much pride.  What will be the result of the adoption of any such proposal?   I agree that a Corporation, a public body, should behave at least as well as the most liberal of private employers – (hear, hear) – but not one whit better;  because if it does behave better, then what it is doing is to create a privileged class of workmen – (hear, hear) – to whom public office is in itself a distinct advantage, and in that case there would be an inevitable temptation – a temptation to which all the American municipalities have fallen a victim – to make these privileged posts the reward of political service (Applause).

What happens then?  In the first place, a man who gets a post of this kind thinks that he has done all that ought to be expected of him, and the last thing he expects to do then is to give fair value for the money he receives. (Laughter).   In the second place, when you have privileged posts of this kind,  going at the will of a political party, there naturally arises a demand for them, and as the number of political posts will never equal the demand,  the next thing is to put two men in to do the work of one. (Loud laughter).   Now, if you consider for a moment the effect of this you will find, I firmly believe,  the whole secret of the failure of American local institutions, and you will see that if we are ever so foolish  as to abandon the business-like and honourable system upon which our public work is now conducted,  we may fall at last as low as our cousins unfortunately have done. 

I said just now, and I wish to emphasise the idea, that the working classes are the people who are most interested in this business.   After all the worst that can happen to the richer class in a town is that they have to pay a little more in the way of rates and taxes.  Although that may be very objectionable to them, still it is never likely to ruin them.  What happens to the working man is that what he wants done is not done – that his health, his life, his enjoyment, his education all suffers, because the business that is being carried on, principally for his benefit,  is being neglected by the persons whom he has placed over it.   I compared local institutions just now with co-operative associations.  That is the true comparison.  The Corporations are, if you please, trustees or directors, but the shareholder are every ratepayer in the city, and the dividends are what return is made to them in the shape of  those improvements and reforms which conduce to their comfort and their happiness.  If they want to have good dividends they must see that the majority of votes is with them.  Then they should elect directors to control the administration.  If they want to have good dividends, let them see that they put the right men in the directorate, and that the administration is thoroughly honest and thoroughly business-like. (Applause). 

My Lord Provost,  if there is one thing more,  if our local institutions are to continue to be a subject of universal satisfaction,  there should continue to be amongst all classes a spirit of devotion and self-sacrifice which will lead them when they are called upon to take their fair share in municipal duty.   I can remember well the time when people despised municipal and local work.  I myself have been accused of being a parochial statesman.  I accept the charge, if it be a charge, as a compliment,  and I am really not certain as to whether I do not value it more highly  than the other compliment which is now frequently addressed to me of being an Imperial statesman.   But to be both is possible, and both of them are worthy of regard;  and, after all, I am sometimes very doubtful whether any man can be an Imperial statesman who has not learned in the first place to take an interest in that which comes nearest to him, and which some people consider as parochial.   But, this low view of  duty and dignity in municipal life has, I am happy to say, very largely disappeared.   No intelligent person would, I think, any longer sneer at parochial statesmen.   I hope that feeling may continue, because if it should ever be that those who are best qualified to serve should also be too idle or too apathetic to serve,  of course it would be ill in their mouths to complain if the administration were to fall into bad hands. 


My Lord Provost, as your youngest burgess,  I ought to apologise for having been  so presumptuous as to offer these suggestions on municipal government.   But, although I am a young burgess of the city of Glasgow,  I am a much older freeman or burgess of some other municipal cities.  By the way, I am disappointed to hear that  the freedom of Glasgow carries with it no privileges.   I remember that in the old days it certainly carried with it a Parliamentary vote,  which I am bound to say I should be most happy to exercise here in a close election and on the right side.  (Hear, hear).  I am a burgess,  I am proud to say, of several other Scottish burghs.  I remember, among others,  that I share with Mr Gladstone the distinction of being a burgess of the royal burgh of Dingwall.  There I have a very distinct privilege,  because by my parchment certificate, I am entitled to haunt the precincts of the burgh.   (A laugh).   I do not know if that would be much use to me in the present life,  but I might find it a most agreeable change hereafter when my wraith is perceived in the precincts of the ancient burgh of Dingwall.  (Renewed laughter.)   Whether with these privileges or without them,  I am very proud of being a burgess of Glasgow,  and I am glad to say that I am prepared at any rate to take this opportunity of proposing the health of the Corporation.  It is something to be a member of a Corporation which controls such an enormous interest as that of the city of Glasgow.  It is, as I said today, the Second City in the empire, and for a long time past, not in this country alone, not in the United Kingdom alone, but in foreign countries also,  I know that the Corporation of the city of Glasgow has a reputation  which is only equalled by that of my own city, Birmingham. (Hear, hear.)  But there is no doubt that this Corporation has, and deservedly has, a reputation for energy and enterprise and successful administration, and shares with all other Corporations of the country  in the reputation for the personal integrity of its members.  I hope that they may long continue to hold that honourable position,  and I most heartily give you “The health of the Corporation”.”  (Applause)