The growth of bureaucracy has come about through the increasing size and complexity
of organisations and the associated demand for effective administration. The work of
the classical writers has given emphasis to the careful design and planning of organisa-
tion structure and the definition of individual duties and responsibilities. Effective
organisation is based on structure and delegation through different layers of the hier-
archy. Greater specialisation and the application of expertise and technical knowledge
have highlighted the need for laid-down procedures.
Bureaucracy is founded on a formal, clearly defined and hierarchical structure.
However, with rapid changes in the external environment, de-layering of organisa-
tions, empowerment, and greater attention to meeting the needs of customers, there is
an increasing need to organise for flexibility. Peters and Waterman, for example, found
that excellent American companies achieved quick action just because their organisa-
tions were fluid, and had intensive networks of informal and open communications.
30
By contrast, the crisis experienced by IBM in the 1980s/1990s over the market for per-
sonal computers is explained at least in part by its top-heavy corporate structure,
cumbersome organisation and dinosaur-like bureaucracy.
31
76
PART 1 MANAGEMENT AND ORGANISATIONAL BEHAVIOUR
A humble pencil sharpener ordered by staff at Portsmouth
Hospitals NHS Trust has cost taxpayers a hefty £30.96.
Just 96p was for the sharpener – the other £30
was the cost of dealing with the invoice.
The high cost of the sharpener is just one exam-
ple of the estimated £1.1m the trust will spend this financial
year handling the invoices of another 37,000 items it needs
but doesn’t itself stock.
Portsmouth North MP Syd Rapson slammed the
‘ludicrous bureaucracy’ allowing it to happen and has writ-
ten to health secretary Frank Dobson demanding an end to
the waste of money.
Mr Rapson said: ‘A private company would have
gone bust if it carried on like this.’
Every time an NHS trust is invoiced for items not
held in NHS stores, taxpayers fork out £30.
The Audit Commission estimates it costs £30 in
equivalent staff hours required to process paperwork for
payment of bills for NHS ‘non-stock’ items.
And yet the pencil sharpener could have been
ordered from the NHS stock catalogue at a cost of 27p –
saving taxpayers £30.69.
This year the Portsmouth trust – which runs St
Mary’s and Queen Alexandra Hospitals – faced its worst
financial crisis yet and managers had to find nearly £3m in
savings.
Emergency measures were drawn up to find sav-
ings without cutting services. And in April, nearly 300 skin
patients were told they could not be treated until May or
June because the trust had run out of money.
Jeff Watling, of the Portsmouth hospitals’ sup-
port and commercial services directorate, revealed the £30
invoice costs in an internal staff newsletter.
He pleaded with staff: ‘Please check the supplies
catalogue for commonly used items and order on a stock
requisition where possible.’ Mr Watling told The News that
the £30.96 pencil sharpener was the ‘worst and most emo-
tive example’ found during a review of items bought that
were not in stock.
NHS trust spokeswoman, Pat Forsyth, said only
senior managers could approve the purchase of items not
held at the NHS Portsmouth stores on Eastern Road.
Anyone wanting to buy non-stock items – which
can include medical equipment and supplies as well as sta-
tionery – should have a very good reason.
The pencil sharpener had been approved when
‘someone was not thinking about what they were doing’.
Labour MP Mr Rapson told Mr Dobson: ‘This is a
small but not insignificant example of how waste is created
and if you can eliminate this stupidity then the NHS will be
much more able to look after patients.’
A spokeswoman for Mr Dobson said the health
sec-retary had not yet examined Mr Rapson’s letter or the
issues it raised, but would be replying in the new year.
Mr Rapson said: ‘This is bureaucracy gone mad.
‘Just think how much money must be wasted
every single year by issuing invoices at this price and what
that cash could be used for.’
NHS pays £30.96 just to sharpen pencils
by David Bamber and Ed Southorn
EXHIBIT 3.1
EVALUATION OF BUREAUCRACY