Turns out the new government wants to know what you and I think about cuts; where, how, and why should we/shouldn’t we.
I think the cutting is going to be the easy part. So I will pass on making a recommendation on them. I think Cameron and crew can cut 15% without affecting services; It may affect the economy, because that will mean many people will be out of work, but the cuts ain’t rocket science.
Where is the real energy needed? Investing.
Yes, that’s right, investing. Investing for the future. Making the new government work. That’s a big job, so I have honed my suggestion down to one particular section of the government spend; Investment. It is still going to happen, but how it happens is more critical than ever before.
What’s Wrong? Nearly everything, excepting the intent. We are currently operating with bureaucratic, oversized, and mal-adapted organisations. Don’t get me wrong, there are great people inside every beast, but it’s still a beast. To be more specific:
1. Bureaucracy: this is killing the investment cycle. Quangos set up processes that kill organisations, not support them. In my 5 years of experience, Quango investment money appears to take an average of 18 months to be realised. This is in addition to the countless hours invested by the hopeful organisaton. Mind numbing. *I am sure the quango can produce the paperwork to justify this process; but that kind of proves my point.
2. Lack of Flexibility; quango investment orgs and for that matter, most councils (sans particular departments in at least one council I know – Leeds) lack flexibility. Investing is tough. It requires tenacity and the ability to adapt with the invested organisation as the outside world changes.
3. Lack of Knowledge; quango investment orgs seem to have the wrong ratio of people who actually know how to invest and provide investment service. Everything is geared to risk aversion and process, when this is the exact opposite of the focus needed for social investment models.
What needs to be done? Streamline and refocus the effort on investment, the original purpose.
1. Invest in real economic models; sift for charities and organisations not willing to take on finance. It appears that many organisations are still getting through and others are defaulting on their debt as if they simply decided not to return the neighbour’s plate that was delivered with cookies.
2. Small is beautiful; investment house boutique model. Stop building massive quango’s. It isn’t the size of the org, but the size of the fund that makes the difference. Link the boutiques under a major investment source to ensure they learn from each other. The economy of scale idea, normally a good idea, counteracts the benefits of knowledge, flexibility, and speed when it comes to investing.
3. Return driven. The current paradigm has lots of paper being pushed in lots of directions. The focus has been put on the process, not the investment. Start measuring the success on both amount invested AND return garnered. Perhaps this is happening now, but it is not having the intended impact in practice.
Sure, there are lots of other ways to affect this area of government. In fact, you could kill it all together. I don’t support that, as it disadvantages us against the entire world (especially China). So if we are going to invest tax money, as a catalyst for real and sustainable economies in the social business arena, let’s stop pretending quasi government organisations are the solution.
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