To provide good value for money, governments and public institutions have been undertaking actions while introducing performance information into their budget processes since the 1990s.

In the United Kingdom, performance budgeting has been introduced prior to 1992[1]:

The budgetary negotiations rely on four key principles presented below and fully implemented in 2015[2]:

  • Guidance to ministries, including timetable and process

The Finance Ministry, being in charge of running the timetable and providing guidance on the spending review process, gives visibility to all stakeholders.

  • Define key policies and priorities

In 2015 the Finance Ministry asked UK departments to define and implement plans to reduce their resources budgets

  • Lead a zero based capital review in order to allocate the capital investment efficiently
  • Stakeholders’ consultation

In 2015 civil servants submitted ~20 000 suggestions for the Spending Review

External experts were also engaged, especially through a network of “What Works” centres in charge of analysing impact and cost-effectiveness of main public spending.

Also, in order to ensure that money is spent in the most effective way in the UK, the customer needs are seriously taken into account.

  • As mentioned, in our article “Switching on the time bomb: planning instead of reforming”, citizens’ satisfaction is fundamental to public-sector operations and improvement.
  • In the UK, customer needs are at the heart of performance management framework

Indeed, the ultimate goal of performance budgeting is to improve outcome for the public!

Laetitia Chatain, Senior Consultant
Edouard Chambalu, Analyst
François Lanquetot, Partner

  • References

    [1] Julian Kelly, “Performance budgeting : United Kingdom experience”, 11th Annual OECD Asian Senior Budget Officials Meeting Bangkok, 17 December 2015
    [2] Ibid

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