Reclaiming unspent money at the end of each financial year can encourage hurried spending when programmes are delayed. The proposed reform would let departments carry funds forward and build reserves for later problems. Persistent underspending for four or five years could still justify reviewing the budget. The proposal is offered as a possible improvement to procurement incentives, with no claim that it would solve every problem.
Notable Point · 9:04-9:57
How annual budget clawbacks distort defence spending
A proposed reform would let departments carry underspends forward instead of encouraging hurried year-end spending.