and D.C felt they had 'done well' or 'had not been much affected'.

During this period of decision making, councillors were seen to have created uncertainty. First they decided to make reductions; this decision was then reversed; and then the decision was reinstated and reductions again became Council policy. Similarly the percentage by which the budget was to be reduced varied. As one D.M.T. member

s a i d , it was a

"scenario built on shifting sand: first it was five per cent, then seven per cent, then three and a half per cent".

That is , changes in the anticipated amount of the reduction was a major source of uncertainty.

Senior management passed the instructions they had received on to middle managers. These were not presented in terms of specific service priorities , with low priority areas first in line for reductions, but as a percentage reduction in divisional budgets. Additional points made by councillors were passed to middle managers: (a) there would be no redundancies;

(b) there would be no development of service without compensatory savings;

(c) councillors would abide by manifesto pledges; (d) budgets could not be overspent.

In addition, managers were told there were to be 'no sacred cows' or automatically protected ar e a s , and were invited to recommend reductions in other divisions as well as their own. Beyond this , managers were left to their own devices to decide what to recommend

for reduction.

Although one senior manager said

"Local Government is cushioned from the most dramatic effects of cuts as their policy is no redundancies",

managing expenditure reductions was still seen to be problematic. One aspect of this problem concerned the different realities which were seen to be imposed by expenditure reductions and which are reflected in the terms used to describe them.

Terminology in Use

The following terms were used to describe expenditure reductions and activities associated with them: 'the cuts'; 'expenditure

allocation'; 'expenditure re-allocation'; 'revenue re-allocation'; 're-allocation of resources'; 'negative growth'; and 'no growth'.

Of these seven, 'the cuts' was by far the most popular term: it was used most frequently by the majority of managers. It was used to define a number of activities associated with expenditure reductions such as recommending reductions in spending, increasing revenue by, for example, implementing charges for services, and managing the effects of reductions. The term does not convey specifically what was to be cut; it does not focus either on financial resources or service delivery. Rather it focusses on the reduction aspect, conveying a general impression of a climate of loss in a dramatic form, the term 'cuts' having far more impact than 'reductions'. There was little debate on the usage of this popular term; it has in fact, passed into common usage with the public. On one occasion a middle manager referred to other terms used to describe expenditure reductions as

"the latest organisational euphemism for the cuts". This suggests that there was a certain amount of conscious

evaluation of terminology amongst some members. The extent to which the remaining six terms can be classified as euphemisms is examined.

These six terms were less popular: they were in the main used by senior managers rather than other groups. Four of the terms focus specifically on financial resources, by reference to 'revenue' or

'expenditure'. Thus the reality of expenditure reductions is defined in financial terms and the 'solution' relies on the manipulation of financial resources. These terms ignore the decrease-in-resources aspect of the situation and imply a steady-state financial position. They also ignore service delivery and the non-financial aspects of the management task, both of which are influenced by resource reduct­ ions. Thus defined, the problem becomes restricted to the area of financial management alone rather than encompassing wider and more sensitive issues such as reduction or withdrawal of service.

The other two terms, 'negative' and 'no growth', could refer either to services or expenditure. Using such terms dilutes the negative value attached to 'no' and exploits the positive connotations of

'growth'. Thus 'no growth' conveys a different and less pessimistic impression than 'the cuts'. In the same way 'negative growth' is a more positive term than 'decline'.

Each of these terms can be used euphemistically where the intention is to manipulate the reality of the situation. Certainly, the use of all terms except 'the cuts' limits a consideration of the full implications of the changes on those affected. On the other hand the way in which senior managers were presented by councillors with demands for percentage reductions in their budgets did not recognise the implications for service delivery. Rather than differing

motives it is the differing realities presented by the terms which are significant: the majority of terms in use define the expendit­ ure reductions task as one of financial management alone.

Summary

In this chapter the literature on organisations and expenditure reductions was reviewed. The concept of organisational monetarism was highlighted as a link between much of the work in this area.

Organisational monetarism proposes a positive correlation between fewer resources and improved organisational efficiency or effective­ ness .

The economic theory of monetarism was set out, and how it has been applied to organisations noted. Organisational monetarism was questioned on a number of grounds. The dietary images in use were found to contain a number of assumptions. The notion of the 'fat' organisation for example was not found to be universally accepted. Similarly the assumption of zero-cost was contested. The link between size/speed of reductions and positive innovation was critically examined.

The instructions on expenditure reductions issued to. managers were outlined. The differing realities underlying the terms expenditure reductions were described.

CHAPTER IV