Performance Management in Government Activities: OECD Conclusions

1. Conclusions from the discussion in OECD, spring 2005 • In principle, all OECD countries use performance information in different ways as support in controlling and budgeting government activities • The criticism that is levelled against this form of control has its origin in performance information being used to a limited extent • Its advocates claim that performance management has contributed to transform the budget process from input-based control to control focused on results • These views are in line with our experience in Sweden

2. Economic control • The concept of economic control consists of two sub-concepts: • Performance management refers to a control system that involves setting goals, collecting performance information and analysing and assessing the results against stipulated goals • Financial control is used to set the economic frameworks for organisations´ resource consumption (appropriations, investment and borrowing frameworks) • Follow-up and evaluation: results are assessed along the lines of both goal attainment and resource consumption

3. How do we work with performance management? • Parliament appropriates funds for various purposes • Parliament establishes goals for different policy areas • Every year, in the Budget Bill, the Government submits a statement of operations for each policy area to Parliament • In turn this is intended to form the foundation for the Government´s budget proposal for the coming years

4. How do we work with performance management? • The Government appropriates funds to its authorities on the basis of what Parliaments decides with regard to the Budget Bill • It does this in a special steering document – the letter of appropriation (goals, performance information) • Annual reports – what the authority accomplished during the year • Objective and results dialogue – once a year between the authority´s management and the responsible ministry

5. Experience of two decades of performance information • What is Parliament´s view? • Operational goals set should be formulated in such a way as to enable them to be followed up • Performance information - relevant to the goals set • Performance and development - reported in quantitative terms to a greater extent than hitherto • The Government´s report must focus on performance to a greater extent than hitherto (incl. focus on activities) • The linkages between goal attainment and budget proposals must be improved

6. Experience of two decades of performance information • What is the authorities´ view? • The performance information compiled is used to a fairly large extent within the authorities • The dialogue between the authorities and the Government Offices appears to be developing in gradual stages • Feedback requirements have greatly increased • Not clear how performance information is used by the Government Offices (shortcomings as regards continuity and competence) • A risk that the amount of information will lead to a lack of clarity in the Government´s priorities.

7. What questions are we considering at present? • Is it realistic to expect that performance information can be used to enforce accountability and allocate resources in the future? • Is it possible to base the reporting of results to Parliament on the performance information that the authorities provide? • Is it possible to evaluate the authorities´ activities on the basis of the performance information that they compile themselves?

8. …possible answers • We have gone too far with performance management´s application and its associated requirements • We attach too much importance to performance management (lack of political interest) • We would gain a lot if we could at least accomplish a follow-up of substance • The Government can to a certain degree use the authorities´performance information in their reporting to Parliament • The Government`s need for performance information varies

9. Where do we go from here? • A working group has been set up consisting of representatives from the Ministry of Finance and the Parliamentary Committee on Finance • The question we are discussing is what kind of performance information Parliament needs to be able to come to a decision on the Government´s budget proposals • what performance information should be submitted annually? • what performance information should be submitted at specified intervals?

10. Where do we go from here? • The Government has chosen to appoint an investigator – with a broad and unconditional mandate – to evaluate how performance management is used in the relationship between the Government and its authorities • Proposals as to how performance management can be reformed and developed in order to improve management of authorities (prerequisites/limitations) • interaction between performance management and financial control • possibilities and limitations for adapting performance management to specific activities and situations