In resource-restricted budgeting, the limits are applied to specific resources, for example, equipment or staff. It works similarly like the incremental budgeting method but in reverse style. For instance, it starts with the supply aspects, i.e., the number of available employees to meet future needs. Moreover, they are also assumed to be fixed factors.
From this stand, it starts working backward to the specific incremental change. According to CIPFA, clear direction is provided and control over questionable resources is offered by this process. However, the practicalities of service delivery are ignored by it.
The local government mostly uses this type of budgeting technique. It offers numerous kinds of benefits, such as reaching out to different parts of the community, eliminating the democratic deficit, less apathy or cynicism towards the local authority, transparency, and democracy, delivery of projects is possible, and improved decision-making. Moreover, it also has various disadvantages: the democratic process is bypassed by it, the council is undermined by it, and biased decisions may take place.
The key objective of performance-based budgeting is to align information related to performance with the management and allocation of resources. These budgets require having information about factors, such as level of objective accomplishment, the productivity/efficiency data, i.e., the cost per activity, the units of outputs and inputs. Similar to zero-based budgeting, it must initiate at the policy level with the company formulating explicit goals related to policy and objectives.
In addition, related performance measures must also be developed by the managers, as it will help them in tracking the accomplishment of these goals. Planning programming budgeting is linked to corporate management and the alternative policies are recognized by it. Moreover, it provides control over the implications associated with the adoption of those specific policies. One of the key differences between this type of budgeting technique and others is that estimation of cost i9s related to programs through the cross-cutting procedure instead of the accredited costs.