STAATSSCHREIBER STATE CHANCELLOR The Swiss innovation of the public sector Kyiv April 22, 2015 STATE CHANCELLOR Dr. Peter Grünenfelder

STAATSSCHREIBER STATE CHANCELLOR 2 General developments increase pressure on modernization: main reasons for the Swiss public sector reforms Strategy & long-term planning transparency and affordable public services new governance for state owned enterprises (public corporate governance) New public management instruments measurable public services (performance indicators) Strategic crisis (f.e. demography) Insufficient public service delivery Financial crisis (economic situation and increasing competition between regions) Media coverage Linking tasks and financial objectives Modernization atmosphere Lack of motivation of public employees in analogy to: A. Ritz (2015) Dissatisfied citizens and public demand "value for money"

STAATSSCHREIBER STATE CHANCELLOR 3 Swiss cantons are mainly responsible for: education, organization, tax regimes, police, health affairs, political rights etc. Advantage for public sector innovation: Federal Switzerland with 26 cantons (states)

STAATSSCHREIBER STATE CHANCELLOR 4 Federal Switzerland on 3 levels

STAATSSCHREIBER STATE CHANCELLOR 5 Using the potential of federalism Competition effect competition (and constant comparisons) between local and regional entities is an advantage for the overall Swiss competitiveness Laboratory effect of federalism possibility for comparisons supports innovation of the overall public sector system Bottom-up reform of the Swiss public sector possibility of 'trial and error' by 'pilot projects' on cantonal and local government level

STAATSSCHREIBER STATE CHANCELLOR 6 Public sector innovation, Swiss direct democracy and citizen orientation  Referendum  mandatory for constitutional amendments and accession to important international organizations  optional for amendments of laws and important international treaties (condition: 50‘000 signatures)  Initiative  for constitutional amendments  100‘000 signatures  important indirect effects (agenda setting)  Swiss cantons as experimental laboratories  optional referendum and initiative were first implemented in cantons and then on federal level  cantons still grant a larger range of direct democratic participation  cantons have extensive own policy responsibilities due to Swiss federalism  e-voting projects

STAATSSCHREIBER STATE CHANCELLOR 7 Citizen orientation in Swiss cantons: Supplementary instruments  financial referendum  mandatory law referendum  decision power of the (cantonal) people about public expenditures and taxes  leads to lower taxes and lower expenditures  most effective mean to control political authorities

STAATSSCHREIBER STATE CHANCELLOR 8 Financial referendum leads to lower taxes average of cantonal tax charge extent of financial referendum right OECD Fiscal decentralization

STAATSSCHREIBER STATE CHANCELLOR 9 Focus of public sector reforms in Switzerland  Efficient use of resources and greater financial transparency - strengthening output and outcome orientation and implementing private sector steering tools  Debt break (increasing financial discipline) and national fiscal equalization  Implementation of strategic and long-term management instruments - strengthening strategic leadership and control  Implementation of mid-term planning tools (integrated tasks and finance plan)  Focus on work results through performance targets and indicators – reporting  Improvement of service quality and customer orientation  Flexibilization of personnel management (abandonment of the status of a public official (tenured career), performance-based salary system) Requirements for public managers and leadership programs in the public sector  start of reforms 1996 (local government level and cantonal level –> federal government level)

STAATSSCHREIBER STATE CHANCELLOR 10 Reform: debt break gross federal debt

STAATSSCHREIBER STATE CHANCELLOR 11 Reform: Comprehensive reform of the public steering system reference: K. Schedler / I. Proeller Legal framework objectives Financial means General steering Annual input steering Outcome objective WHAT DO THE CITIZIENS WANT? Output objective WHAT SERVICES DO WE DELIVER? Production process of public services Resource objective HOW MUCH DOES IT COST? Actual resource Actual output Actual outcome Legal framework (constitution, laws) Outcome evaluation and controlling Output controlling Financial controlling

STAATSSCHREIBER STATE CHANCELLOR 12 Strategic hierarchy as a basis for long and medium term planning Integrated tasks and finance plan ca. 50 – 80 main tasks (outcome, output and financial objectives) ca. 100 – 150 output groups more than 500 outputs individual objectives for public servants Development Plan ca. 12 policy areas (outcome objectives) Responsibility outlook Control instrument for: Government Parliament for information Government State chancellery and ministries Parliament for approval Divisions and units outlook / up-date: 10 years / 4 years 4 years / annually 4Jahre / annually Political Level Administrative Level

STAATSSCHREIBER STATE CHANCELLOR 13 Midterm planning in Swiss cantons Figure: Cantons with an integrated tasks and finance plan Reference: University of St. Gallen

STAATSSCHREIBER STATE CHANCELLOR 14 STATE CHANCELLOR Integrated tasks and finance plan – content General development Financial objectives (one-line budgets) Development priorities Objectives (Outcomes and Outputs) Indicators tasks Integrated Tasks and Finance Plan  4 years (budget year and 3 planning years)  Update (annually and adding one more planning year)  Context long-term – mid-term planning: mid-term plan as control tool for successive implementation of the priority program of the government

STAATSSCHREIBER STATE CHANCELLOR 15 Citizen Orientation, public sector reforms and Swiss direct democracy: „Security initiative“ by the people  subject of the initiative: at least one policeman per 700 inhabitants  consequences: immediate modification of governmental planning and shift of resources to security appropriate density of police (1 policeman per 700 inhabitants) inhabitant per policeman inhabitant per policeman (incl. municipal police) number Strategic plan of the state government

STAATSSCHREIBER STATE CHANCELLOR 16 Integrated tasks and finance plan: objectives and indicators and controllability by the parliament Controllability IndicatorsIndicators Objective

STAATSSCHREIBER STATE CHANCELLOR 17 Annual reporting: transparent information about achievement of objectives Status

STAATSSCHREIBER STATE CHANCELLOR 18 Improved parliamentary supervision  improved financial controlling (regular reports by the government; parliamentary MIS)  (financial) audit reports of the audit office directly submitted to the parliament  strong supervision of government and administration activities  not an isolated financial view but a direct link between public services tasks and financial funding  new output and outcome control (controlling reports; evaluation reports)  approval of government's mid-term strategies based on the integrated tasks and finance plan  parliamentary committees focusing on main content of administration activities (not automatically adjusted to the governmental organization)

STAATSSCHREIBER STATE CHANCELLOR 19 STATE CHANCELLOR Strategy review Strategy reports (periodically) Parliamentarian intervention Long-term strategy (horizon: 10 years, Up-date: 4 years) Mid-term planning Integrated tasks and finance plan / budget (horizon: 4 years Up-date: annually) Reporting Annual report with financial statement (annually) operative strategic operative implementation Short term planning and implementation controlling (ongoing) New Management Cycle

STAATSSCHREIBER STATE CHANCELLOR 20 New Government Cycle Strategic monitoring Developing long-term strategic options Governmental decision making on long-term strategies Developing mid-term strategies Integrated tasks and finance plan Implementing governmental programs Controlling and evaluation operative planning governmental items Communication of governmental decisions Government meetings Annual reporting Performance process at the interface of the politico-administrative system

STAATSSCHREIBER STATE CHANCELLOR ‘Open’ civil service  The profile and career path of Swiss public officials are very diverse  Selected not on the basis of a specific course of study, but on the basis of specific skills  No lifetime appointments  Swiss civil service is not a career civil service, but an open system in which every citizen is entitled to seek public office  Heterogeneous profiles, also from the private sector at all levels of the hierarchy 21

STAATSSCHREIBER STATE CHANCELLOR Leadership development through performance appraisal Motivation 22

STAATSSCHREIBER STATE CHANCELLOR 23 Example: top and middle management in a Swiss Canton  Leadership of the top and middle management is based on annual outcome and output objectives that are derived from the integrated tasks and finance plan of the government.  achievement of objectives, task fulfillment and measures are assessed in the fourth quarter of the year  assessment: base for performance salary and premium (in a defined financial range) for the management

STAATSSCHREIBER STATE CHANCELLOR 24  increased (cost) efficiency of the public administration  transparent public services  increased controllability for parliament  permanent controlling cycles (measurement of achievements of outcome, output and financial objectives); (financial) plausibility checks based on performance information  new management system strongly supported by top and senior public management  objectification of relationship between political and administrative level  more realistic planning  improved citizen orientation of civil servants  strengthening long-term orientation (measurable 10 yrs. / 4 yrs. planning); political reliability  setting priorities by the government  credibility of the public sector ("value for money") Results

STAATSSCHREIBER STATE CHANCELLOR 25 STATE CHANCELLOR  do things that you have never done before  achieve objectives that have never been achieved before  start to implement methods that have never been used before  improve results that have been satisfying so far  exceed impediments that you built up yourself  leave the status quo behind you even if it causes insecurity reference: E. Buschor Swiss public sector: culture of change