Putting money in the wrong bucket

A bequest left by a former nurse has embarrassed senior politicians.  She directed that her money should be used by the government of the day ‘as they see fit’.  Her solicitors misinterpreted the will and sent the bequest to the political parties that were in power.  Following public exposure, the coalition partners have agreed that the money should go to the Treasury, where it will disappear into general funds.

I doubt there is a local authority or a hospital trust anywhere in Britain that would have acted in the same way.  It is a standard principle in British public administration that public bodies can only act in accordance with the powers they hold within the law.  In most circumstances, that means that money can only be spent in ways that have been specified by law,  but there is an important exception.  Where funds become available that are not subject to those constraints, they can be used on a discretionary basis, without direct restraints, subject to the general reservation  that the governing body is acting in trust for the benefit of the public.  Then the money can be used for the kind of thing that normal funding can’t  – prize competitions, pilot projects, public amenities, events, charitable art-works, donations, whatever.  The patterns of accounting vary, but local authorities and pubic trusts will almost always have an ultra vires fund, designated unrestricted funds, a charitable arm or a separate account, distinct from other funding, so that they can manage bequests, donations and the like appropriately.

The current government, by contrast, seems to have been nonplussed by the situation.   The parties’ first reaction was to accept the solicitor’s statement at face value; the second, to drop the embarrassing money, like a hot potato, into the nearest bucket.   It might be, of course, that the UK cabinet considers that they already have unlimited authority to use money in any way they please (if they did, they would be mistaken).  It might be that they couldn’t think of anything better to do with the bequest, which begs the question why anyone should donate money to the government  in the future.  I suspect there is another reason for the misunderstanding.  It rests in the dominance of a new political class , whose preparation for public  office relates entirely to Westminster politics, and who have no previous  background in public service.   If more of them had the relevant experience, they would known what to do with a routine donation.

One comment

  1. Amanda Bassett

    I personally think the best managers are those that start at the bottom and work their way up and never ask their staff to do something that they would not do themselves. This apparently is not the Westminster way. You would not expect someone with absolutely no experience to manage MacDonald’s, Marks & Spencer or Barclays Banking group so why are we expected to trust politicians with no previous experience except Westminster work, to manage the country and fully understand all the problems that go with it?

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