Ministry of Finance Sweden 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

Ministry of Finance Sweden 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

Ministry of Finance Sweden 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

Ministry of Finance Sweden 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

Ministry of Finance Sweden 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

Ministry of Finance Sweden 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.

Ministry of Finance Sweden 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?

Ministry of Finance Sweden …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

Ministry of Finance Sweden 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?

Ministry of Finance Sweden 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