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1  Background

1.1  The Review of Expenditure on Policy Advice

In 2010 the Government appointed a committee, chaired by Dr Graham Scott, to review expenditure on policy advice (“the Review”). The committee was asked to provide recommendations on the scope for refocusing and/or reducing total government expenditure on policy advice to ensure high professional standards, cost effectiveness and strong alignment with government policy priorities.

Among the findings of the Review was that across the policy agencies there is difficulty in identifying policy expenditure.

The committee made 36 recommendations as to how policy advice and its management and quality could be improved.

One of the recommendations of the Review was that the Treasury, working with other agencies, should establish a common definition of policy advice, and

“following establishment of the common definition of policy advice, the Treasury should lead a process for agencies to reorganise the policy advice-related appropriations they currently administer around that definition, including, where necessary, establishing multi-class output appropriations that have policy advice according to the common definition in a separate output class from related outputs such as ministerial servicing or Crown entity monitoring”.

1.2  Cabinet’s Direction (Authority for Reorganisation)

The authority to reorganise appropriations for policy advice is provided by Cabinet minute CAB Min(11)16/16. At its meeting on 18 April 2011, Cabinet directed Treasury, working with other agencies, to put in place a common definition of policy advice for agencies to reorganise their appropriations for Budget 2012. This requirement is mandatory.

At this meeting, Cabinet also directed the Treasury to establish common performance measures for these policy appropriations. Performance measures are currently being developed and will be tested through the Policy Benchmarking Pilot Project. Due to the lack of availability of comparable data across departments and the complex nature of policy performance measures, these will not be ready for Budget 2012. Guidance on how to manage your performance measures for Budget 2012 is provided in Section 4.

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