Stop salami slicing and merging departments to save money - it won't work, warns APSE

Local authorities resorting to so-called salami slicing or merging of services to beat down costs are more likely to drive them up, says a finance expert.

Image: HW
Image: HW

Principal consultant for Association for Public Service Excellence Andy Mudd told a major conference hosted by the group last week that when budgets were slashed local authorities often resorted to one of three measures to try and limit the hardship.

They introduced salami slicing – arbitrary reductions across budgets; they restructured management and shed staff; or they took the more radical approach of saying "we can no longer afford this service" and will merge departments.

"With salami slicing you run out of salami and enter a spiral of decline: if you lay off mechanics from you parks’ fleet department you often increase costs because vehicles are out of service longer and you need another vehicle, which is more expensive.

"Reducing staff almost always results in the most knowledgeable people leaving, meaning others have to relearn - an inefficient use of staff. And merging services makes organisations bigger and less efficient not more cost effective."

Mudd said a key to clever use of tightened resources was understanding demand and shaping it to fit your skills set and resources. There was little point buying a chewing-gum removal machine if staff across the authority did not have access to the kit.

"Staff will clean a path in one part of the town but neighbouring park users or businesses will also want it and you create the likelihood of complaints. You have ramped up demand but failed to meet expectations. Should you do that when you have fewer resources?"

He said: "You need to understand where demand comes from, who is demanding, what they want and where they want it. You then need to maximise planned services and minimise reactive services because it is hard and inefficient sourcing unallocated funds for the latter."

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