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Executive Summary

Review of Expenditure on Policy Advice

In response to the Review of Expenditure on Policy Advice, the Government directed Treasury to lead the development of a common definition of policy advice. The Government has directed departments that manage Votes with policy responsibilities to reorganise their policy related appropriations in time for Budget 2012 based on this definition.

Purpose of the reorganisation of appropriations for policy advice

The purpose of the reorganisation of appropriations for policy advice is to standardise the recording of expenditure on policy advice[1] and thus make the total cost of producing policy advice for Ministers transparent to the Government, Parliament, and the public.

What is the role of departments with policy responsibilities in this reorganisation?

It is the responsibility of departments with policy responsibilities to carry out all necessary steps for the reorganisation of appropriations for policy advice as outlined in section 3 of this document.

This requires departments with policy responsibilities to identify the cost of producing their policy advice outputs. The costs of these outputs should then be separated out from their existing appropriations and shifted into separate appropriations, or output classes that sit within a Multi-class Output Expense Appropriation (MCOA).

Departments are expected to submit relevant Coredata changes prior to the baseline update submission that will occur in early 2012[2], and include fiscally neutral adjustments (FNAs) in that submission.

What is the role of Treasury in this reorganisation?

It is the responsibility of Treasury to provide policy agencies with a common scope statement for policy advice, supporting information, and guidance as to how they should complete this task.

Notes

  • [1]A list of departments that had policy expenditure in 2010/11, as identified to the Review of Expenditure on Policy Advice, is provided at Annex 1.
  • [2]Note that this update could either be a February Baseline Update (FBU) or March Baseline Update (MBU). The exact date hasn't been determined yet, but will be announced in a Treasury circular. In this guidance we use the expression “baseline update in early 2012”.
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