PRESENTATION TO THE PORTFOLIO COMMITTEE ON PUBLIC SERVICE AND ADMINISTRATION Evaluation of the Batho Pele Principle of Value for Money in the Public Service 25 June 2008

OVERVIEW OF PRESENTATION 2  BACKGROUND  AIM AND OBJECTIVES OF THE STUDY  CONCEPTUALIZATION OF VALUE FOR MONEY  KEY FINDINGS  CONCLUSION  RECOMMENDATIONS

BACKGROUND 3  Section 195 (1)(b) of the Constitution states that public administration must be governed by democratic values and principles. One of these principles asserts that efficient, economic and effective use of public resources must be promoted.  The Batho Pele White Paper on Transforming Public Service Delivery (1997) defines Value for Money as providing public services economically and efficiently.  Section 196 of the Constitution mandates the Public Service Commission (PSC) to promote the constitutional values set out in Section 195 and to propose measures to ensure effective and efficient performance in the Public Service.  Inclusion of the Implementation of and Compliance with the Batho Pele Principle of Value for Money in the PSC work plan.

AIM AND OBJECTIVES OF THE STUDY 4  The broad aim of the study was to establish the status of understan- ding the Batho Pele Principle of Value for Money by departments.  The specific objectives of the study were to: assess how the principle of Value for Money is understood in the Public Service; evaluate the performance of departments in implementing approaches intended to improve Value for Money of government services and products as required by the White Paper; and formulate recommendations about how the principle of Value for Money could be better implemented in national and provincial departments to enhance Public Service delivery.

CONCEPTUALIZATION OF VALUE FOR MONEY 5 The concept of Value for Money comprises three elements: Economy: Explores whether specific inputs are acquired at the lowest cost and at the right time. Efficiency: This refers to how productively inputs are translated into outputs. It further means that there should be maximum output with little cost. Effectiveness: The extent to which outputs achieve the desired outcomes.

CONCEPTUALIZATION OF VALUE FOR MONEY CONT 6 Value for Money is not only about cutting costs, it is also about careful spending by departments while at the same time ensuring that effective service delivery is not compromised. There are ways of ensuring Value for Money which include elimination of wasteful expenditure, proper management of time when rendering public services and simplification of procedures to be followed to access certain services (for example completion of government forms ).

CONCEPTUALIZATION OF VALUE FOR MONEY CONT 7 Seven key aspects of public service delivery that departments need to target to ensure Value for Money: Plan carefully prior to implementation Strengthen project management Reduce complexity and bureaucracy Improve public service productivity Be more commercially astute Tackle fraud Better and more timely implementation of policy and programmes

KEY FINDINGS 8  The Public Service still faces significant challenges in understanding and implementing Value for Money. These challenges include: Value for Money and its elements are not a common part of the Public Service discourse. human resource constraints and shortages. Reward systems within departments are not creating the necessary sanctions on poor performers. Reporting Systems do not always produce sufficient information.

KEY FINDINGS CONT 9  There is no common understanding of Value for Money.  Working definition developed for purposes of this study.  Value for Money in the Public Service is maximizing value as perceived by the citizen and optimally balancing efficiency, effectiveness, and economy within the constraints of public expenditure management.  In departments where there are generic norms and standards, a more concrete set of descriptions was offered.  There are inadequate systems and processes to promote and realize Value for Money.  Most officials did not have an awareness of any specific efficiency indicators, and the understanding of measuring efficiency in general appeared limited.  Most participating departments rated their performance on Value for Money as being average to good.

RECOMMENDATIONS 10  An appropriate and operational definition of Value for Money must be institutionalized in departments.  An effective monitoring and evaluation system should be developed to enable the continual assessment of Value for Money.  Substantial investments should be made in reporting systems.  Value for Money is interpreted differently by Departments in the Public Service.  Value for Money is often derived from vision and mission statements.  Value for Money should include a medium to long term perspective to avoid future implications that may impact on the initial gains.

CONCLUSION 11  There is no common understanding of Value for Money principle in the Public Service.  Value for Money is interpreted differently by Departments in the Public Service.  Value for Money is often derived from vision and mission statements.

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