Incentives
a busy station, by Terry Freedman
Headteachers have a habit of making up shortfalls in some areas by taking the money from those departments that have managed to save some money in order to make a big purchase. It feels like a betrayal, it feels like robbery, and the long-term outcome is that either the head of department finds a job elsewhere or they adopt a policy of spend, spend, spend once they receive their capitation allowance at the start of the year. In my option, robbing Peter to pay Paul is, ultimately, a policy almost designed to give rise to perverse incentives.
Another unintended consequence, which follows on from this, is that if you manage to save a tidy sum of money the Head is likely to come to the conclusion that you clearly did not need that amount of money in the first place. The outcome will be that your careful financial management will be rewarded by being given less money next time.
In both of these scenarios the quite reasonable conclusion the head of departtment could come to is that the best policy is to spend as much money as possible, preferably the whole of your capitation allowance — if not more. Please note: I am not advocating this, just making the point that it is a likely outcome.