Budgeting Essay

A number of times many of the government organizations fail to meet their budgeting financing needs based on a number of reasons. Many attach these to limited funding that affects their ability to meet the needs of their people as a result affecting the service delivery aspect of the counties. In response to this, the heads have advised for budget cuts to reduce on the level of financing accessible and hence increasing the funds that the government has at its disposal to spend on the most relevant projects. The counties are forced to exercise budget cuts as a way of allocating funds to projects that matter most.
Budget cuts refer to the reduction in figures developed in budgets for spending on different projects. The counties may reduce the expenses and have their monies focused in more vital or priority areas. The study focuses on the Essex County forced to effect the changes that affected their budgets. The study also discusses the effects that these changes had to the general budget and the general counties affecting on the services of the people. The counties need to fit their budgets into the actual finances provided by the authorities (Shattock, 2014, p.135).
A reduction in the number of officers that the county would hire indicated a budget cut. In budget cuts, staff of the county faces fears of sucking or a reduction in hiring as a result. Many of the council operations and resources will remain focused in priority aspects limiting their ability to hire other personnel. The county aims at reducing their costs of operation or expenses hence having to reduce their staff or maintain a limited number for successful budget implementation (Cornell, 2014).
The effects of budget cuts that the county of Essex faced during the years reflect in the limited maintenance aspects. The less money the county has for their budgets the less they allocate to many sectors and retain the massive part of the funds to essential sectors like health. The county in 2014 was requesting funds to improve on their maintenance aspects that would help them manage their infrastructural demand in maintenance aspects. The county roads remained filled with potholes inconvenience the road users and have contributed to the dissatisfaction of the masses. In a move to have the county of Essex cut their budget expenses, they requested the road maintenance aspects be taken over by the Colchester County (Dickson, 2014).
The MP was on record requesting support to have the county relieved of the duties of maintaining the streets, pavements and the streetlights. These would help the county have reduces expense burden that will translate into better management of the other obligations that they have ranging from health, education and others.
Appealing to the public for support in funding is an indication of budget cuts. The Essex County is appealing to the public to help them raise funds for their projects that will aid in supplementing to funding allocated to them by the central government. The county identified a failure in reaching its mandate to the people as a result of limited funding from the government and hence appealing to the masses to help it raise the funds. According to the source, the county had a budget deficit of 300 million Euros that it felt the need to effect rather than cut. An indication of this was that the county had not received sufficient funding from the authorities and it was trying to improve the funds so as to fully implement their budget. (This is Essex, 2010).
Budget cuts have different impacts on the economy. The budget cuts may affect the economy in provision of services despite the growing demand that the county faces. The use of the Aggregate Demand (AD) and Aggregate Supply (AS) will indicate an effect that the budget cuts normally inflict on the economy.
In government expenditures, where there is a high consumption rate, investment, export factors and government spending, the AD increases massively as indicated in the graph below:
Aggregate demand increase leads to an increase in the growth of the county which the opposite indicates the negative for the economy. Based on the same, a reduction in budget or budget cuts for a county leads to the reduction in the rate of growth of the county. Budget cuts lead to reduced spending from the county; these indicate the affected consumption due to poor services. A good example is that of the poorly maintained roads and pavements that affect the level of appreciation of the services by the people. Changes in these aspects affect the changes in the GDP of the country that then leads to poor performance in general terms. Development of different polices for the county allow for the development and improvement of the services that the people receive from their counties (Needham, 2014, p.2). The development of policies that allow for the support of the counties GDP and the consumption levels through which the county may develop leads to improved economic conditions even during budget cuts.
Long run economic growth depends on Aggregate supply that much suffers from the budgeting effects of the county. Long run economic growth and aggregate supply too indicate growth in economic performance (EconProph, 2011). These too have an effect on the AD and the economic growth effect that it may have. The graph below indicates the changes in long-range average supply and the effects that it may indicate to the economy as a result.
A rise in the LRAS and a rise in the AD indicate an economy that is developing in a favorable economic manner. An economy that is growing with a high AD and a low LRAS is developing through an inflationary margin that indicates an effect to the economy. In budget cuts, the economy may suffer these effects based on the inability of the funds provided to support the economy well enough and cause a positive effect that would help the economy advance.

Conclusion

In conclusion, an economy massively depends on the funding that it collects from the people and their application in aiding it grows. The economy will have to have the funds employed in the provision of the right services to affect the forces of demand and supply the right way to lead to a sustainable economic growth. An economy with limited consumption, expenditure and savings have a difficulty controlling their growth into the right direction and hence a reduced or affected GDP. Poor performance of counties indicates a poor performance of the general performance of the country as a whole hence leading to general economic effects that trickle down to the populations.

Bibliography:

Cornell, A 2014. Essex County Council Faces 49 Million Euro Government Funding Cut. Echo
News. Retrieved on March 5, 2015 from http://www.echo-news.co.uk/NEWS/11677728.Essex_County_faces___49million_govenrment_funding_cut/
Dickson, A 2014. Colchester MP Calls for Streets to be Reclaimed by Borough Council. East
Anglian Daily Times. Retrieved on March 5, 2015 from http://www.eadt.co.uk/news/colchester_mp_calls_for_streets_to_be_reclaimed_by_borough_council_1_3535765
EconProph, 2011. AD-AS Model Explained. Retrieved on March 5, 2015 from
http://econproph.com/2011/03/02ad-as-model-explained/
Needham, D 2014. UK Monetary Policy from Devaluation to Thatcher, 1967-82, Palgrave Macmillan.
Shattock, M 2014. International Trends in University Governance, Routledge.
This is Essex, 2010 Essex: We Need the Public to Help Us Find Ways to Save 300million Euros.
Essex Chronicles. Retrieved on March 5, 2015 from http://www.essexchronicle.co.ul/need-public-help-ways-save-163-300m/story-12622290