Beware of false profits

In these times of austerity, there’s a greater focus than ever on how much things cost. I’m working with several of my public sector clients, for example, to help them to work out the cost of the services they provide and to use this information to make better decisions. The same is true across the commercial sector, where lower costs equal higher profits. Except that they don’t always. Not in the big scheme of things. Continue reading

From block grant to spot purchasing

I went to an excellent seminar the other day, in which Bristol City Council’s health and social care commissioning team explained key changes in how they are going to fund various organisations around the city. But while the changes make sense financially and in terms of service user choice, they could spell problems for the provider organisations concerned. Continue reading

Time to be open about costs

Organisations in the not-for-profit sector, just like their private sector counterparts, require time, effort and resources if they are to be managed effectively. But there is increasing criticism from some quarters of the level of management and administration costs that these organisations incur. Charities and other not-for-profits need to be more confident in explaining their costs and in making the case for good management. Continue reading

The costs of sharing corporate services

In a report issued today, the National Audit Office has concluded that government attempts to save money by sharing ‘back office’ services such as finance and human resources have actually ended up costing more money than they have saved. It appears that by¬†creating complex services overly tailored to individual departments, the five shared services centres review by the NAO have increased costs and reduced flexibility. There has also been a failure, the report says, to develop the benchmarks necessary for measuring performance. Continue reading

Understanding costs

With the economic forecasts oscillating between bad and awful, many organisations are taking a long, hard look at their costs. With this in mind, I thought now might be a good time to explore some of the different types of cost and what we can do about them. Continue reading