Royal Botanic Garden Edinburgh’s Financial Model Attracts International Interest

The Royal Botanic Garden Edinburgh (RBGE) in Scotland may not be the most likely hotbed of financial innovation, yet it is leading the way with a concept that could bring about positive changes in spending policy on public services around the world.

Dr Alasdair Macnab FCMA, CGMA, Director of Corporate Services at the 345-year old institution has devised an outcome costing model which is attracting international attention.  The Malaysian Government’s finance ministry recently sent a delegation of civil servants to Scotland’s capital to work out how they can apply the approach back home.

Macnab’s financial model works on the principle that measures of outcomes for an organisation’s work need to be associated with the costs incurred in achieving them.  It identifies and aggregates employee activities and non-salary expenditures that contribute directly to the achievement of strategic objectives.

He argues that if the model could be applied to state-funded bodies, then government expenditure could be aligned far more accurately with desired national outcomes.

RBGE’s financial model attracted the interest of the Malaysian Government because it is a nation aiming to become an emerging economy by 2020, says Macnab:  “One of the things its government needed to do in order to achieve that was to use outcome budgeting as a mechanism for allocating resources.”

Macnab, who trained as a management accountant, believes more governments should follow suit to make the best possible use of their resources.  He says:  “Budgeting at the moment is still about what happened last year, plus or minus.  All it does is reinforce inefficiency.  I’m proposing another system.  If I know the actual cost of outcomes, I can start prioritising.”

The full report on Macnab’s outcome costing model is published in this month’s Chartered Institute of Management Accountants’ magazine.

The Royal Botanic Garden Edinburgh is a charity (registration number SC007983)