In addition to setting the performance agenda for the year ahead, (revenue) budgets in the healthcare sector can facilitate tighter financial control, more responsive decision-making and staff motivation. However, many healthcare managers may lose respect for the use of predominantly incremental budgets given that they typically do not explore historical service redundancies that may exist nor reward efficient use of resources or facilitate long-term service planning. The lengthy budgetary process can also predispose to out-of-date budgets. Top-down budgetary allocation can also be susceptible to political influence and as supplementary estimates can be accessed, managers (and senior clinicians) may not exercise budgetary discipline. Rigid systems of budgeting can also stifle creativity and innovation. Hence, there is a need to link budgeted levels of multi-annual expenditure to recognised and meaningful performance indicators.