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Tuesday, September 28, 2010

Rob Ford's Financial Plan for Toronto

In this video, Ford discusses how his municipal staff attrition plan, which is more aggressive than George Smitherman's, will result in massive savings for the city.

Another proposal that Ford introduces, which he and I discussed in July, is the introduction of financial incentives for city employees to find savings.

One of the problems with the civil service in general is that public employees do not receive bonuses the way that those in the private sector do. It is thought that the job security, relatively high pay and benefits that civil servants receive is compensation for that.

But the problem with that thinking is that once a civil servant has a job (and this applies to Department Heads and Managers in particular), they have a vested interest in maintaining high departmental expenditures. If they do not spend their full allotment during a fiscal years, they fear that their next year's budget may be cut because those preparing the budget will assume the department can run on a reduced amount. That's why many civil service departments go on spending-sprees near the end of the fiscal year to ensure every penny of their allotted yearly budget is spent, often on unnecessary expenditures including wasteful consultants fees.

Ford's plan finally provides civil servants with an incentive to stop this wasteful practice that will benefit both them and the taxpayer. It's the most intelligent innovation that any of the candidates has introduced in their financial plan.

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