Day 1 policy process and budgetary processEN

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Policy process and budgetary process Richard Barneveld

The Ministry of Housing, Spatial Planning and the Environment: 

The Ministry of Housing, Spatial Planning and the Environment The most important task of the Ministry of Housing, Spatial Planning and the Environment  (VROM) is to create a pleasant living environment, to continue a spatial planning policy and contribute to a sustainable development.

The Ministry of Housing, Spatial Planning and the Environment: 

The Ministry of Housing, Spatial Planning and the Environment Minister and State Secretary FEZ Secretary General Directorate General for Housing Directorate General for Spatial Planning Directorate General for Environmental Protection Inspectorate Government Buildings Agency Central Departments HRM Administration

Policy process and budgetary process: 

Policy process and budgetary process Quotes “ Offstage the dictatorship flows blood, offstage the democracy flows money.“ Sigmund Graff “ You can’t always get what you want. “ Mick Jagger

Programme: 

Programme 1. Insight into the budget process and its different phases 2. The actors and there specific roles in this process 3. The link between policy, budget and responsibility

1. Insight into the budget process and it’s different phases: 

1. Insight into the budget process and it’s different phases The Policy cycle: 3 months/3 years/..? Versus The Budget cycle with strict time schedules

1. Insight into the budget process and it’s different phases: 

1. Insight into the budget process and it’s different phases The policy cycle 1. Setting of objectives

1. Insight into the budget process and it’s different phases: 

1. Insight into the budget process and it’s different phases 1. Setting of objectives 4. Putting the instruments into action 3. Determine policy instruments 2. Make operational policy goals 6. Evaluation 5. To give account 1. After an intensive study a policy based note and supporting evidence made it clear that the amount of lead in Dutch houses (water pipes etc) is responsible for 35% of all pollution of the soil and has a substantial (bad) influence on the national health care. To stop further contamination of the soil, the objective is to reduce the impact of this pollution by 95% within 5 years by replacing the lead by other materials 2.The program consists of € 300 mln for a period of 5 years. The total estimated amount of lead is 3 mln kg. It is calculated that for the removal of lead the government will subsidize € 100 per kg. Each year a reduction will have to be realized of 20% 6. Evaluation will have to take place to invest whether the goals and objectives are being realized. 3. The chosen instruments are: Subsidy, Communication, Covenants 4. In 2008 a commercial will be seen at the TV to make public that this subsidy exists; * leaflets will be available at builder merchants and family doctors * people can apply for this subsidy * a covenant will be made with the industry to prevent the manufactory of new lead pipes 5. Each year the amount of lead will have to be accounted for and in the annual financial statement the amount of the granted subsidy will be presented. The policy cycle: An imaginary example

1. Insight into the budget process and it’s different phases: 

1. Insight into the budget process and it’s different phases The Budget cycle 1. Budget preparation

1. Insight into the budget process and it’s different phases: 

1. Insight into the budget process and it’s different phases The interaction of the budget cycles

1. Insight into the budget process and it’s different phases: 

1. Insight into the budget process and it’s different phases Budget preparation 2008 October 2006: the National Budget Instructions (RVB) (minister of Finance) November the internal “translated” instructions by FEZ January/February the budget proposals of the departments March: the Policy Letter April: The letter of budget limits June: the first draft budget and the Secretary of State rounds August: the Cabinet’s version of the draft budget September: the final draft budget for the Council of State 3rd Tuesday Budget Day: Budget Memorandum and the ministry budget October a Questionnaire and a fact-finding by the Second Chamber October/November Debate in the Second Chamber begin 2008 Debate in the First Chamber

1. Insight into the budget process and it’s different phases: 

1. Insight into the budget process and it’s different phases

1. Insight into the budget process and it’s different phases: 

1. Insight into the budget process and it’s different phases

1. Insight into the budget process and it’s different phases: 

1. Insight into the budget process and it’s different phases Budget execution 2007 Monthly statements Spring memorandum 1st supplementary budget Budget memorandum Autumn memorandum 2nd supplementary budget

1. Insight into the budget process and it’s different phases: 

1. Insight into the budget process and it’s different phases Rendering account 2006 October 2006 the National Budget Instructions (RVB) (minister of Finance) November the internal “translated” instructions by FEZ January 2007 closing down the books, internal control February reports in the financial statements, annual report April the cabinets version on the concept annual report and final budget act 3rd Wednesday may Accounting Day June: Debate in the Second Chamber Later Debate in the First Chamber

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1. Insight into the budget process and it’s different phases 1. The results of the policy cycle are to late (just after February/March) so they have to wait another year for the new budget preparation ! 2. The outcome of evaluations or figures about indicators are to late, so they have to use obsolete figures The confrontation and consequences ? 3. The political discussion about the budget preparation doesn’t take all year 4. The strict budget process saves a lot of time: no constant adjustments !

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PAUSE for 10 minutes

2. The actors and there specific roles in this process: 

2. The actors and there specific roles in this process The actors The different processes

2. The actors and there specific roles in this process: 

Public opinion 2. The actors and there specific roles in this process Minister & State Secretary Deputy Secretary’s Board of Deputy Secretary’s Permanent Secretary Administration FEZ Audit Bureau of the Permanent Secretary Ministry of Finance Other ministers The Cabinet Council of State Court of Audit Communication Personal matters First & Second Chamber Board of Deputy Secretary’s & minister

2. The actors and there specific roles in this process: 

2. The actors and there specific roles in this process The major roles of FEZ are: Control Advise Consolidate Coordinate To set the boandries

2. The actors and there specific roles in this process: 

2. The actors and there specific roles in this process Budget preparation 2008 October 2006: the National Budget Instructions (RVB) (minister of Finance) November the internal “translated” instructions by FEZ January/February the budget proposals of the departments March: the Policy Letter April: The letter of budget limits June: the first draft budget and the Secretary of State rounds August: the Cabinet’s version of the draft budget September: the final draft budget for the Council of State 3rd Tuesday Budget Day: Budget Memorandum and the ministry budget October a Questionnaire and a fact-finding by the Second Chamber October/November Debate in the Second Chamber begin 2008 Debate in the First Chamber

2. The actors and there specific roles in this process: 

2. The actors and there specific roles in this process October 2006: the National Budget Instructions (RVB) (minister of Finance) November the internal “translated” instructions by FEZ January/February the budget proposals of the departments Minister & State Secretary Board of Deputy Secretary’s Permanent Secretary FEZ Bureau of the Permanent Secretary Personal matters Board of Deputy Secretary’s & minister Deputy Secretary’s Ministry of Finance Administration Audit Court of Audit

2. The actors and there specific roles in this process: 

2. The actors and there specific roles in this process March: the Policy Letter Minister & State Secretary Board of Deputy Secretary’s Permanent Secretary FEZ Board of Deputy Secretary’s & minister Ministry of Finance

2. The actors and there specific roles in this process: 

2. The actors and there specific roles in this process April: The letter of budget limits Minister & State Secretary Deputy Secretary’s Board of Deputy Secretary’s Permanent Secretary FEZ Ministry of Finance Other ministers The Cabinet Board of Deputy Secretary’s & minister Public opinion

2. The actors and there specific roles in this process: 

2. The actors and there specific roles in this process June: the first draft budget and the Secretary of State rounds August: the Cabinet’s version of the draft budget September: the final draft budget for the Council of State Minister & State Secretary Deputy Secretary’s Board of Deputy Secretary’s Permanent Secretary FEZ Bureau of the Permanent Secretary Ministry of Finance Other ministers The Cabinet Council of State Communication Board of Deputy Secretary’s & minister

2. The actors and there specific roles in this process: 

2. The actors and there specific roles in this process 3rd Tuesday Budget Day: Budget Memorandum and the ministry budget October a Questionnaire and a fact-finding by the Second Chamber October/November Debate in the Second Chamber begin 2008 Debate in the First Chamber Minister & State Secretary Deputy Secretary’s Board of Deputy Secretary’s Permanent Secretary FEZ Bureau of the Permanent Secretary Ministry of Finance Other ministers The Cabinet Council of State Communication First & Second Chamber Board of Deputy Secretary’s & minister Public opinion

2. The actors and there specific roles in this process: 

2. The actors and there specific roles in this process Acts, Memoranda, Letters Acts: to authorise by the Second and First Chamber Memorandum: from the minister of Finance to inform the Second and First Chamber Letters: confidential letters from the minister of Finance to his fellow ministers

2. The actors and there specific roles in this process: 

2. The actors and there specific roles in this process Acts, Memoranda, Letters Ministry of Finance spending Ministry Second Chamber Budget Memorandum Draft budget 3rd Tuesday September Spring Memorandum 1st Supplementary budget/act 1 June Autumn Memorandum 2nd Supplementary budget/act 1 December Annual report Final budget act & 3rd Wednesday May Ministerial annual report Letter on budget limits Letter on budget totals August letter

2. The actors and there specific roles in this process: 

2. The actors and there specific roles in this process Conclusions ?

Slide30: 

PAUSE for 10 minutes

3. The link between policy, budget and responsibility: 

3. The link between policy, budget and responsibility Quotes “Budget: a method to worry even before the money is spend instead of worrying afterwards." Voltaire “money gets its quality by its quantity." Gaston Durnez  

3. The link between policy, budget and responsibility: 

3. The link between policy, budget and responsibility Functions of the Budget for the House of Representatives ?

3. The link between policy, budget and responsibility: 

3. The link between policy, budget and responsibility Functions of the Budget for the House of Representatives Authorizing function Allocation function Management function Audit function Macro-economics function

3. The link between policy, budget and responsibility: 

3. The link between policy, budget and responsibility Budget: A budget becomes an act by authorization by the Second - en First Chamber. It is the record of the financial figures in relation to the proposed policy for one specific year. The act consists of estimates of obligations, cash expenditure, cash receipts and in case of agencies, income and expenditure, the balance of income and expenditure and capital expenditure and receipts.

3. The link between policy, budget and responsibility: 

3. The link between policy, budget and responsibility The structure of an Act Act of Parliament Budget statement Policy section Policy agenda Policy budget articles Operational management Agencies Appendices In depth appendix motions and undertakings

3. The link between policy, budget and responsibility: 

3. The link between policy, budget and responsibility Determination of the Budget statement of the ministry of Housing, Spatial Planning and the Environment (XI) For the year 2006 (figures in € 1000)   (1) Description Budget   Obligations Cash Receipts  TOTAL 3 416 482 411 077       Policy Budget articles 3 044 162 388 653 01 To promote a good working housing market 12 45117  378 0 02 To stimulate sufficient houses, sustainable and differentiated housing supply 54 804 472 711 91 03 To ensure sufficient choice and payable houses 1 902 906 1 929 506 376 106 04 To optimise the spatial considerations 11 118 11 973 0 05 Area development 33 266 42 428 10 300 06 To limit climate change and air pollution 46 797 85 357 0 07 To improve the environmental quality of water and soil 156 967 137 465 0 08 To improve the environmental quality in the city 35 063 40 733 0 09 To reduce the risks of waste, rubbish, radiation 19 601 40 196 0 10 To enforce the (inter)national environmental policy 85 683 90 641 917 11 To improve the external safety 12 897 14 454 0 12 Inspection 63 344 63 564 882 13 Government housing and architecture 97 756 97 756 357       Budget articles 372 320 22 424 14 general 166 084 370 502 22 424 15 Nominal and unforeseen – 6821  818 0 The Minister of Housing, Spatial Planning en the Environment,

3. The link between policy, budget and responsibility: 

3. The link between policy, budget and responsibility What will have the preference of the Second Chamber ? A: a budget statement with only 3 budget articles OR B: a budget statement with more than 10 budget articles

3. The link between policy, budget and responsibility: 

3. The link between policy, budget and responsibility The Policy Agenda The political point of view (spearheads) of this minister What are the priorities in the year to come A select number of priorities In line with the agreement from the Cabinet: what will be the main issues for the years to come A clear connection with the budget articles A financial outline of the major changes in the budget articles

3. The link between policy, budget and responsibility: 

3. The link between policy, budget and responsibility A budget article The general policy objective Description Responsibility Determinant factors Performance indicators Budgetary outline Operational objectives - Operational objective 1 Motivation Instruments Performance Target groups Performance indicators Overview of the policy evaluations

3. The link between policy, budget and responsibility: 

3. The link between policy, budget and responsibility Budget article: an example   The general policy objective Description To protect inhabitants against unacceptable environmental pollution   Responsibility The minister is responsible for the instructions and procedures to ensure that pollution will be cleared and to prevent new pollutions     Determinant factors The achievement of these objectives depends on the maintainability feasibility and the fraud-proof of the instructions   Performance The gaining of these objectives has as a result that :     Further: in 2008 the ministry will grant approximately 40.000 permits; a covenant will be concluded with the industry

3. The link between policy, budget and responsibility: 

3. The link between policy, budget and responsibility Pitt fall’s

3. The link between policy, budget and responsibility: 

3. The link between policy, budget and responsibility Many performances turns out to be activities; The price of the performances is not always clear; Its is not clear which quantifiable objectives are aimed for; The link between money and objectives is not always clear; The management information systems are not always adequate; The responsibility is not always clear.

3. The link between policy, budget and responsibility: 

3. The link between policy, budget and responsibility Budget article: an example   The general policy objective Description To protect inhabitants against unacceptable environmental pollution   Responsibility The minister is responsible for the instructions and procedures to ensure that pollution will be cleared and to prevent new pollutions     Determinant factors The achievement of these objectives depends on the maintainability feasibility and the fraud-proof of the instructions   Performance The gaining of these objectives has as a result that :     Further: in 2008 the ministry will grant approximately 40.000 permits;

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The End... Thank you for your attention !