Business Solutions for Budget Managers in Health and Personal Social Services

William S. Bryans

• Publisher: Routledge
• Year: 2020
• eBook ISBN: 9781000154627
• Topic: Social Sciences
• Subtopic: Social Science Research & Methodology
• Index: Social Sciences

Managers responsible for spending public money in health and social welfare are facing unprecedented pressures to deliver better services against a background of fierce competition for resources, profound organizational change and the creation of internal market places. In this practically-directed book, William Bryans explains how business principles can be applied in the public service context to enable managers to meet this challenge. The author demonstrates how it is possible to create a surplus for service development by effective strategic management of external and internal financial environments, operational management of workloads and resources, and tactical intervention to limit budget fluctuations to tolerable levels. Each chapter includes a purpose statement, an outline of relevant theory and practice, a keypoint summary and a case study based on real world situations.

1

Defining the problem(s)

Objectives

The objectives of this chapter are to examine the main issues and in general terms set out the various problems which confront modem budget managers. Budget problems are usually first manifested in budget reports, but the underlying causes are complex. This is mainly the result of the reform programme.

Appropriate solutions are dependent on the correct diagnosis of the problem, or problems. In this chapter these problems are connected to the business culture topics:

• The main business elements that regulate financial management are identified.

• The need for an integrated approach is discussed.

• The outline effect of the budget manager’s market share on income and budget is shown.

• The relationship between cost, case load and budget is defined.

• The impact of case mixtures and an alteration in care balance on resource consumption through increased dependency is demonstrated.

• The contract capability and criteria for the measurement of income are identified.

• Examples of significant variations and the need for planned intervention is emphasised.

The chapter continues with:

• An analysis of the main problems.

• A summary of their causes.

• An outline of various business solutions.

• A competence based approach to budget security.

Arising from this, the overall structure of the book is established.

Familiar territory

In every age where money has been the currency of business, budget managers have experienced the basic problem that they have too little. Inevitably their problems have been compounded by their masters requiring too much. Where a financial plan produces a surplus, demands upon savings always outstrip the reality. If there is a deficit, then the manager is automatically to blame. In the unlikely case of a balance being achieved there is usually an inference that the performance was still somehow disappointing.

The last decade has seen the growth of a business culture in health and social services management. Coterminous with this has been a subtle shift away from the concept of budget holding and towards an emphasis upon budget management. In many ways this change can be viewed as a move from simpler passive control of a budget to the much more complex active intervention in order to compete.

In comparison with their predecessors, who enjoyed the benefit of a fairly consistent financial growth rate, modem budget managers are confronted with more complex tasks. A near-0 financial growth rate, together with requirements to alter the balance of care consistent with the mixed economy, results in significant budget problems.

Whatever the era, budget problems continue to depress budget managers. Overspendings seem to dominate and can, if allowed, become an obsession at all levels. This does not have to be so.

Budget management problems are usually first detected in the financial reporting mechanism. For most budget managers the pattern shown in Table 1.1 will be familiar.

Table 1.1

Care group	Budget for Month 5 £k	Spend for Month 5 £k	Over spend £k	Under spend £k
Community workers	50	60	10
Residential contracts	30	25		5
Housing partnership	15	21	6
Community workers	25	20		5
Home helps	10	14	4
Totals	130	140	20	10

Familiar questions that arise are:

1. Is it a true position?

2. Are the overspendings uncharacteristic?

3. Are there any seasonal fluctuations to be accounted for?

Table 1.1 is, in respect of a budget, intended to cover the provision of services to mentally handicapped people. It has been subjected to an alteration in the balance of care in favour of the community. The origin of significant problems is to be found elsewhere in the system. This suggests an outline action plan from which a structured intervention may be developed (see Figure 1.1).

Figure 1.1. Outline action plan

The budget manager must see whether tactical intervention is the best solution in this case or whether it is necessary to go further. The manager also needs to know if underspendings can be used or whether they are only temporary.

Significant variations

When we look at this position in terms of the year’s performance to date, it is evident that there is a consistent over-commitment in the case of hospital, housing association partnerships, and the home help budgets (see Table 1.2). However, contracts with private providers and expenditure in the community have balances remaining.

Table 1.2. Identifying budget variations

The budget manager must look at the business plan before any dramatic revision—especially the implementation of additional spending plans— takes place.

• In the case shown in Tables 1.2 and 1.3, the business plan reveals that the hospital portion refers to a ...

Table of contents

• Cover
• Title Page
• Copyright Page
• Dedication
• How to get the best from this book
• Content
• Table of Contents
• Part 1
• Part 2 Synopsis — operational management and tactical intervention
• Part 3 Synopsis — Developing and measuring competence
• Reading list
• Articles by the author