It is not unheard of that senior managers are disciplined by their employing authority for overspending. A slightly less harsh face of concern about budget management is to find public sector officers on ‘performance related’ pay for sticking to a budget…
To our mind, whether or not it is appropriate to discipline someone for overspending is not a cut and dried question. The Human Rights Act 1998, and the duty it imposes to act compatibly with people’s Convention rights, may require expenditure which nobody could foresee when the budget for each department was set. Secondly, the approach of the courts, where important statutory functions have been construed as duties, as opposed to discretions, is that duties must be funded, regardless of the availability of resources in any one budgetary pot, since the duty is a corporate duty on the whole authority.
When social care functions have been triggered towards specific individuals as a result of their having met the eligibility criteria which the Members or Authority have set or approved, it seems to us that the law requires the expenditure on appropriate services, regardless of how much a particular budget holder has left in the coffers. The best example of support for this analysis is found in the East Sussex ex p Tandy case, and in the South Lanarkshire residential care case, where the arrangements for providing a place were said to be able to be put off, but only so long as the authority provided something else to meet the need in the mean time.
Taken to its logical conclusion and applied to the English legal framework, this makes for a scenario in which certain ‘Very Important People’ in a local authority are allowed to treat the (say, residential care budget) pot as made of concrete and padlocked, whereas ‘Not So Very Important’ people have to accept that however well they’ve managed their budgets for their particular responsibilities all year, (say, for home care), someone ‘on high’ will always be able to come along and siphon off funds from their permeable coffer, to bail out the budget holder with the concrete pot and the duty. Not only is this invidious as between a group of staff, all of whom are no doubt trying hard to come in on budget – but it fails to acknowledge that statutory duties (and not merely discretions) are owed to both disabled users of home care services (under the CSDPA) AND to residential care clients (under s21 NAA) (and to s117 MHA aftercare clients, to boot!).
The above analysis makes it clear that there are circumstances (that is, where a statutory duty of service provision has been triggered) where it might be a public officer’s duty to overspend, and the duty of the Members/senior managers with authority, to vire money out of reserves to reflect that fact, rather than bite money back from other functions which they saw as equally important at the beginning of the year. Financial control is all very well, and obviously an important part of performance management and delivering efficiency, but in law there is a fundamental legal difference between duties and discretions, of which it might be assumed that all elected Members and Board members in a Health Authority had heard! Whilst it is not always easy to distinguish one from the other, the Courts have been busy putting most social care functions on one side of the line or the other, over the past 5 years.
See the list of duties vs. discretions in the specific question related to that topic: Duties vs discretions, for guidance in this regard.