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This seems like sensible policy.

Aim to be in a slightly better position than where you need to be, so when you can manage a few surprises and allow a little slippage (as all evidence in health and all industries suggests you probably will), you are not in a crisis position.

That said, I think there is a valid question of how much this should have been prescribed, given we are promoting local autonomy. Given that overspending in one locality means another, more prudent (or more lucky), locality will be forced to transfer resources, setting some playing rules such as minimum targeted underspends seems like a rational response to me.