Of course this sounds outrageous to any one ho does not understand Government, both national and local, finance.
Each Department gets an allowance based on an estimate of what they think that they will need. The estimates are then put into requests for funds and are never correct and very often these requests are enlarged to allow for refusal and wheeler dealing. So all Government estimates of future spending are complete rubbish. They haven't a clue what is going to happen in their next financial year any more than you or I do.
But if a Department has under spent and has a surplus that surplus does not stay with them but returns from whence it came, the Treasury. This is the whole nub of the problem.!
If they under spend they are praised and told that next year they can do the same and don't need as much as they are asking for now...................If they overspend then their previous estimates look stupid as they did not ask for enough and so the name of the game is to break as near to even as is possible.
If they break even then their estimates appear to have been right and they have a better chance of getting what they ask for in future years. Instead of surpluses going back into the common pot for the common good, they spend them on crap, in order, to show their masters how wonderful they are at guessing correctly and balancing the total money that went out with the total that came in !!! Profits are not allowed in Government finance on a Departmental basis.
To the heads of these Departments, Quangos, etc. the money doesn't matter as they don't get bonuses for frugal housekeeping they only get fame for being good at guessing! This is the difference between Governmental Finance and Corporate Finance. NO REWARDS for good work, only a pat on the head and a lump of sugar !
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