lean and efficient?

A piece in the New Statesman recently caught my eye (yes I do read publications other than the Guardian!)

An interesting aspect of the piece is its questioning of the universities actions in seeking to appoint someone to what tends to be referred to as a 'non-job' i.e a role in a public organisation which serves little real purpose. All the more perplexing, the article suggests, is that this appointment is taking place amidst a back-drop of a major funding review. Fiddling as Rome burns.

It makes me wonder just how valid the arguments are that cutting funding, or the threat of, increases efficiency out of pure necessity. Is the reality somewhat more complex than this? It certainly seems a caricature that well funded organisations are bloated and inefficient; like a 18th century baron with a bad case of gout whereas less well funded organisations are by extention lean and effective.

Could the case simply be bad management and a failing organisational structure which fails to recognise its priorities? If so will funding cuts not make this situation worse??