result oriented reforms in the netherlands: theory versus practice
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Result oriented reforms in the Netherlands: theory versus practice. Maarten de Jong Budget Affairs Directorate Netherlands Ministry of Finance ( Also affiliated to Erasmus University Rotterdam ). Contents. NPM & performance movement Performance budgeting experience 2002-2012 - PowerPoint PPT PresentationTRANSCRIPT
Result oriented reforms inthe Netherlands:theory versus practice
Maarten de JongBudget Affairs DirectorateNetherlands Ministry of Finance(Also affiliated toErasmus University Rotterdam )
January 10th 2014
Contents• NPM & performance movement
• Performance budgeting experience 2002-2012
• Delivery approach in the Netherlands 2007-2010
• Lessons from a difficult process
• Accountable budgeting reform
• Policy evaluation practice
• Final thoughts
Current fiscal context Netherlands
Question often asked these days:
HOW HELPFUL ARE PERFORMANCE BUDGETING AND PERFORMANCE MANAGEMENT IN CREATING FISCAL SPACE?
3
9 December 2009The Origins of Program Budgeting in the Netherlands4
New Public Management – performance movement
‘A goal without a plan is just a wish’
Antoine de Saint-Exupéry
Budgetinfrastructure Servische delegatie5
New Public Management – performance movement
From a budgetary perspective:
Intended results of PBB reforms
Increased transparency of government spending and results
More effective allocation and management of resources
Allocative efficiency gains
Operational efficiency gains
Increased result orientation
Budgetinfrastructure Servische delegatie6
Result oriented budgeting reforms in the NL
7 oktober 2010
•Traditional line item budget•up until 2001
•Performance based program budget•2002 - 2012
•Accountable budgeting reform•from 2012
Performance budgeting experience 2002-2012
For each policy article (poliy program) these questions had to be answered :
Fiscal Consolidation in the Netherlands7
Budget Annual report
What do we want to achieve? Did we achieve what we intended? What will we do to achieve it? Did we do what we meant to do? What will be the costs of our actions? Did it cost what we expected?
Performance budgeting experience 2002-2012
Fiscal Consolidation in the Netherlands8
Program budget
Ministry of Transport
Program budget
Ministry of Transport
Program budget
Ministry of Transport
Budget art.32 Safety - General objective: Continuously improve the safety of persons on roads or railroads as well as the safety of public transport
Total expenses (x 1.000 €): 57.245
Budget art. Budget art.
Budget art.
Budget art. Budget art.
Budget art.
Subart.32.01 Operational goal:
Reducing the number of victims
on roads
Expenses: € 49.211
Subart.32.02 Operational goal:
Reducing the number of victims
on railroads
Subart.32.03 Operational goal: Improving social safety in public
transport
Policy measures sub article 32.01 Expenses (x 1.000 €)
32.01.01 General strategy and policy development 1.814
32.01.02 Safety standards for vehicles and technological innovation 4.349
32.01.03 Influencing behavior of travelers 21.216
32.01.04 Adaptations to the infrastructure 0
32.01.05 Inspection 21.832
Performace budgeting ‘as intended’
(Safety program Ministry of Transport 2011)
Performance budgeting experience 2002-2012
Fiscal Consolidation in the Netherlands9
Indicator Policy goal Programme Ministry
Number of medals won by the Netherlands in the Summer Olympics
46.3: Sports in the Netherlands symbolises ambition, is a source of recreation, and contributes to our national image at home and abroad.
46: Sports Health
Percentage of students who can be considered “motivated”
Students receive higher education, and scientific staff conducts high-quality research.
6: Higher education Education
Study intensity: weekly number of hours students spend on study-related activities (perception of the student)
Students receive higher education, and scientific staff conducts high-quality research.
6: Higher education Education
Position in Failed State Index for eight selected countries
2.5: Regional stability by effective crisis prevention, crisis response, crisis resolution and post-crisis build-up efforts.
2: Peace and stability, effective humanitarian aid and good governance
Foreign Affairs
Delivery approach in the Netherlands 2007-2010
Fiscal Consolidation in the Netherlands10
Box 3. Short explanation of the Prime Minister’s Delivery Unit of the United Kingdom
Established in 2001, the Prime Minister’s Delivery Unit oversaw the realisation of a number of the second and third Blair administration’s top priorities concerning education, health, crime, transport, and internal affairs. In its approach, the PMDU employed a combination of:
performance management;
tailored support for specific problems;
high-frequency reporting (or even real-time data);
prompt action.
In so-called stock takes, held every 2-3 months, the Prime Minister held the responsible minister to account about the progress toward projected targets. In this way, significant progress was made towards realising the key objectives. For example, the percentage of hospital emergency departments that met the four-hour target (the time in which a patient must be seen, treated, admitted or discharged) rose from nearly 80% in 2001/02 to over 95% in 2004/05.
Source: power point presentation of Sir Michael Barber (former head of PMDU) at the Netherlands Ministry of Finance on October 29th 2007
Inspired by UK
Delivery approach in the Netherlands 2007-2010
Fiscal Consolidation in the Netherlands11
Examples of priorities from government coalition:3. Bringing closer a solution to the conflicts in the Mid-East20. Annual growth of 5% for public transport by railroad51. Reduce nr. of stolen bikes by 100.000 compared to 2006
Lessons from a difficult process• Aim for realistic mid-term (two years) and end results (four years) as the first year of
government, it is usually too early for reporting
• For some high-profile political goals, the central government’s role may turn out to be a rather passive one and may therefore not qualify
• It may not always be feasible to use the intentionally stable structure of the budget for political priorities that are more unstable by nature
• Since every line ministry wants to be included in the government’s top priorities, some priority goals may just reflect “going concerns”. Ambitious cross-cutting goals may help commit several ministries at once.
• When working with cross-cutting goals, agree on a clear accountability structure between line ministries to prevent stove-piping and unclear ownership
• Mobilize the knowledge of line ministries early on in the process when formulating quantitative goals. This process should not be left to political leaders and top civil servants
Fiscal Consolidation in the Netherlands12
Lessons from a difficult processJust a classification (de Lancer Julnes 2008):
•Reassurance: Government shows it is doing what it is supposed to do with the taxpayers’ money.
•Compliance: Agencies demonstrate that they comply with performance measurement regulations.
•Program learning: Learning from results may lead to program changes or maybe just to a better informed dialogue.
•Enlightenment: Externally, enlightenment can lead to mobilization and put an issue on the political agenda. Internally, enlightenment can lead to more informed decisions and better-educated stakeholders; this can generate new insights and challenge previously held perceptions.
•Legitimization: Performance information can be used to rationalize, justify or validate current, past and future courses of actions and decisions (including funding levels).
Fiscal Consolidation in the Netherlands13
Lessons from a difficult process
Fiscal Consolidation in the Netherlands14
Strong emphasis line ministries on compliance and legitimization
Lessons from a difficult processHow helpful is PI in budgeting?
+ Program structure useful for accountability and managerial flexibility
+ Performance information is helpful for internal steering and oversight (e.g. agencies)
- Performance information seldom plays a role in allocation by politicians
- Input information and policy instruments remain vital to Parliament
- The budget cannot be the comprehensive and objective ‘mother of all policy documents’
- A supply side oriented, uniform approach to performance information is no recipe for use
15
Rely on multi year ex-post policy evaluation for assessing effectiveness
instead of
Relying on PI use in annual budgetary cycle
Accountable budgeting reform
• Add more detailed financial information
• More selective use of policy information and indicators in budget documentation
• Renewed emphasis on policy evaluation
16
Accountable budgeting reformMore detailed financial
information in budget
17
Budgetinfrastructure Servische delegatie18
Accountable budgeting reform
More selective use of policy information and indicators in budget documentation
Accountable budgeting reformPrograms in which the dominant role of government is a truly executive one, seem most fit for performance budgeting and management (some 20-25% of our budget)
19
Impact of Gvt. on desired policy
outcome?Significance
financial contribution
Gvt. ?
Is policy executed by
Gvt. agency?Gvt.
Stimulates
Gvt. Regulates
Gvt. Finances
Gvt. Execute
s
Decisive
Decisive
Limited
Limited Yes
No
Accountable budgeting reformNumber of performance indicators per ministry following Accountable
Budgeting reform (2013)
voettekst20
Foreig
n Affair
s (BZ)
Justice
(V&J)
Intern
al Affair
s (BZK)
Educat
ion OC&
W)
Financ
e (Fin
)
Defense
(Def)
Infras
tructu
re (I&
M)
Econo
mic Affair
s (EL&
I)
Social
Affairs
(SZW)
Health
(VWS)
Funds
and s
maller
budg
ets (1
2)0
50100150200250300350400
20112013
Accountable budgeting reform
21
Types of Evaluations
I Ex ante Evaluations
II Ex post Evaluations
Policy Reviews
Impact Evaluations
Cost Benefit Analyses
Other Evaluations
III Savings and reform options
Cost effectiveness
studies
Spending Reviews
Comprehensive Spending Reviews
List savings options
Renewed emphasis on policy evaluation
Policy evaluation practice –policy reviews
voettekst22
Questions ‘Policy review’, introduced in NL to improve ex-post policy evaluation (source MinFin RPE 2006)
• What is the problem behind the policy? Is this problem still current?
• What is the cause of the problem?
• Why does the government find it is responsible for solving this problem?
• Why does the responsibility lie with the central government (and not at local or EU level)? How has the
responsibility been shaped and why?
• What objective has the government formulated for the solution to the problem?
• What instruments are being or will be enlisted? What relationship is there between the instruments? Do
these instruments overlap?
• What is known about the implementation of policy?
• Do the instruments contribute to the objectives formulated (to a solution of the problem)?
• What are important positive and negative side effects?
• How is it decided what funds will be allocated? What is the argumentation behind this?
Unit of analysis is government program and its goal as stated in budgetSelf assessment with mandatory involvement of independent expert and Min. of FinanceMulti annual evaluation agenda in which each objective is evaluated every 4-7 years
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Policy evaluation practice - spending reviewsIndependent, non-political working groups (civil servants and external experts);Chaired by senior officials not responsible for the policy;Non veto: ideas may not be blocked by other members working group;Choice of policy options is decision by Cabinet;Reports are sent to parliament and are downloadable for wider public.
Special Case Comprehensive Spending Review 2009/2010 (in addition to above):One compulsory spending reduction option of 20%.
Comprehensive Spending Review 2009/2010 (i)
• Financial crisis provided a real sense of urgency for fiscal consolidation:o The 2007 budget surplus changed
into to 5.5% GDP budget deficito Assignment by council of ministers:o “Provide insight into different cutback options and their
effects”
• 20 Spending Reviews covering a broad range of policy areas. • 75% of government spending was included.
24
25
Political use of Spending Reviews 2009/2010
% u
ptak
e m
easu
res
from
Com
preh
ensi
ve
spen
ding
rev
iew
in e
lect
ion
prog
ram
mes
Political parties
Substantial influence of Spending Review Reports on 2010 election programmes of Dutch political parties
Final thoughts
26
Final thoughtsCultural aspects should not be overlooked
Evaluation capacity but also mentality:
• Selection of appropriate staff: mixture of analytic and research capacity (introvert) and staff with the ability to network, deal with resistance and able to operate in a fluid environment (extrovert)
• Result orientation in formulating and substantiating policy proposals (a PB structure can help strengthen this awareness)
• Performance planning and monitoring ought to enhance rather than erode result orientation of motivated public professionals
27
Final thoughts• Performance management (or budgeting) is not and end in itself
• Intensifying a performance dialogue is more important than the technicalities of the system chosen
• Although we may prefer performance assessment to be tied to our budget calendar, systems and formats
our ultimate goal should be to stimulate more:
• Dialogue about performance and results, • Preferably linked to budgetary decisions • At any level in government
28
Thank you!
Maarten de [email protected]+31 6 25021897