7.5 Conclusion
Looking towards a managing for outcomes environment it would appear that the financial management system needs to be designed in a way that supports both a results-focus and clear accountability. It needs, therefore, to have a greater emphasis on outputs than the strategic management system, whilst providing for the allocation of resources within an outcomes framework. This would suggest that the current system needs to be amended to provide for:
- proactive baseline reviews – to help move away from incrementalism and to allow for better assessment and management of capability / ownership issues;
- reallocation of resources in a more responsive manner; and
- wider appropriations to provide managers with greater flexibility, whilst also retaining sufficient transparency.
The system will need to be supported by good information about the various costs associated with the delivery of services – if only to ensure that the right “price” is paid for different outputs.
Amending the system in this way should provide both Ministers and chief executives with more opportunities to align how they expend resources with the outcomes they pursue. This flexibility will be constrained, however, if Ministers and chief executives do not have sufficiently robust information about the outputs they need to deliver, or the capability required to do so.
Their flexibility will also be constrained if some of the rituals around the budget process, and perceptions of the quality assessment role undertaken by central and lead agencies are not amended or better understood. For example, my recent experience suggests that current budget processes allow for a reasonable amount of gaming as Ministers seek to gain the resources they have identified as necessary for promoting particular initiatives, or for maintaining current capability. The short timeframes available for assessment of budget initiatives, and the information asymmetries that characterise the current process will, arguably, always lead to this tension. Changing the routines, allowing for more engagement early in a process (whether policy development or strategic planning processes) may provide for increased trust between agencies, better information for central and lead agencies required to assess budget initiatives, and more informed allocation of resources.
