Irish taxpayers deserve evidence that real value is being provided from the taxes they pay as successive Governments lay great stress on the value for money exercises that they carry out. The recent Comprehensive Expenditure Report 2015-2017 heralds a new round of Value for Money and Focused Policy Assessment Reviews – http://www.per.gov.ie/comprehensive-review-of-expenditure/
Origin of Value for Money Reviews: Value for Money Reviews are not new -since the 1990s there has been a process in place to review value for money in the public sector. This formal process was put in place in 1997, revised in 2006, and facilitated by a comprehensive guidance manual published by the Department of Finance in 2007. At the heart of the manual is the Programme Logic Model which requires public expenditure programmes to be analysed in terms of inputs, activities or processes, as well as the outputs, and outcomes that are required to achieve specific strategic objectives.
Recent Developments: The VFM process is now governed by the new Public Spending Code. The Code was introduced, following a Government decision of July 2012, so as to allow for a much more focused approach to conducting expenditure evaluations. The Code admits that the previous VFM process – “…has not achieved its full initial ambitions, in terms of breadth of coverage and direct relevance for the resource allocation process. Some shortcomings … have been identified by practitioners…” – http://publicspendingcode.per.gov.ie/
The VFM procedures have been updated to ensure that they form an effective input into the ongoing resource allocation process. The Programme Logic Model is still relevant as the tool for analysing expenditures. Each Department and Office is required to :-
·prepare an annual and multi-annual VFM schedule,
·provide for review of strategic programmes over a three-year period;
·complete each such review within a 6 to 9 month timescale as a rule; and
·include with each review a uniform output – a ‘balanced scorecard’ – assessing each programme against a range of criteria of use to decision-makers.
In addition, the VFMs are to be supplemented by Focused Policy Assessments to give sharper and more narrowly-focused assessments designed to answer specific issues of policy configuration and delivery. These Focused Policy Assessments are to be conducted by individual Departments.
New Round of VFMs: The Comprehensive Expenditure Report 2015-2017provides an indicative list of topics, for Value for Money and Focused Policy Assessment, covering thenext three years. The topics listed relate to just four Departments, the President’s Establishment, Shared Services, the Office of the Comptroller and Auditor General (C&AG). The C&AG is well versed in VFM reviews- it’s website shows that, over the past twenty years, 87 VFM Reports have been completed and published – http://www.audgen.gov.ie/.
The final list of topics to be evaluated will be subject to consultation with Departments and Government. It is surprising that only 16 topics are announced in the indicative list – less than 6 per year. One would hope that, when the final list is agreed, all Departments will have commitments to carry out, and publish, both Value for Money Policy Reviews and Focused Policy Assessments. Otherwise how will Irish taxpayers know that they are they getting real value for money from public expenditure?
Tom Ferris is a consultant economist specialising in Public Sector Governance, Better Regulation and Transport Economics. He was Senior Economist in the Department of Transport until February 2006. Since then, he has undertaken consultancy projects for the World Bank, the OECD, the High Level Group on Business Regulation, and a number of private sector companies. He is an occasional lecturer in public sector economics at NUIG, UCC, and Public Affairs Ireland and he writes regularly for PAI Publications. He holds a Masters degree in economics from University College Dublin and a Fellowship from the Chartered Institute of Logistics and Transport.