Incremental Budgeting and the Assumption of Growth: The Experience of Local Government

This chapter explains the concept of incrementalism and applies it to the budgetary practices of English local government as they have developed in recent years. It suggests that ‘incrementalism’ may well rest upon an assumption of growth in expenditure. Incremental budgeting, then, is characterised by limited budgetary review coupled with non-rational forms of analysis. The rate of inflation in the United Kingdom has been one of the highest amongst Western industrial nations. The chapter focuses on how local authorities reduced their expenditure. A new phrase was introduced by Circular 171/74, the notion of ‘inescapable commitments’. The importance of this phrase is that it directed attention to the pressures for additional expenditure built into the local authority’s financial system. Both strategic and issue analysis have as their underlying concern the construction of information in a way that will facilitate the making of informed and responsible choices between alternative claims upon resources.