Following the successful amendment to the GSP I spoke in the July 2013 States meeting in support of the GSP, as amended.
Sir, Whilst I spoke earlier about the concerns I had with the overall governance structure of the GSP, I do fully support the need for a Government Service Plan and the need to prioritise workstreams.
I would just like to focus briefly on a couple of areas in relation to the criteria used for the prioritisation and also on zero-based budgeting because, whilst I agree with the need for both, I would like to raise a couple of issues that I believe, from my experience, need to be addressed.
I support using multi-criteria analysis to prioritise work. In fact, this is where Public Accounts Committee is leading the way. As Members will know we have extremely limited resources and a huge potential number of reviews. We have recently developed criteria by which to judge suitable subjects for review and have begun to use this as a means to prioritise out work.
It is unclear precisely from this report exactly how each project, a term which is not defined, will be prioritised, other than being based on the criteria we agree in terms of the States objectives. The closest we get to knowing is in 5.8 where it states that ‘this appraisal will need to take into account the depth and breadth of any impact of the service with options appraisals and the financial implications.
In plain English I guess this means that projects will also be assessed in terms of benefits and costs. However, one word not mentioned in this report is ‘risk’. Every project should be assessed in terms of risk. To date very few are and is something I will mention in later debates.
It’s all very well accepting projects in terms of their costs and benefits, but you need to know the dangers, both internal and external or environmental and organisational. Risk analysis – you can use those criteria, but some more risky than others for a variety of reasons, such as how clearly it is defined, how costs have been determined, whether it’s been done before, how complex it is and whether it will be acceptable to those who will be affected by it. And one advantage of this approach is that it provides an opportunity to engage with those with expertise in that area within Departments.
In a paper by Philips and Bana e Costa with the snappy title; ‘Transparent prioritisation, budgeting and resource allocation with multi-criteria decision analysis and decision conferencing.’
They make the point that final decisions will mainly be a matter of human judgement, with models informing that judgement. To be useful to decision makers, models should be able to accommodate financial and non-financial benefit criteria – but also state risk and uncertainty, data and judgement and be transparent, while providing an audit trail.’
In other words it is essential that the process is open and transparent otherwise it will have no hope of success.
This lead me on to zero based budgeting. I am totally supportive of this approach and believe it is long overdue. To some extent we have been working towards zero based budgeting for a while now through the FTP process. But the problem with that is that it has been going on in a disjointed and unstructured way. Perhaps it would have been better if this exercise had been done before we went down the FTP route.
Anyhow, I am glad it is now being considered and will happily support it’s introduction. However, I would like to raise 2 notes of caution. The first is that this in itself will be a major piece of work and will take up a lot of time. It is not something that can be done in its entirety every year. The second is that we will not be able to make the best use of it until resource accounting is introduced. For instance, if you prepare a budget based on what you expect to spend for a particular period of time, it is impossible to assess whether you are working within budget during the year if you don’t adjust your accounts so they are prepared on the same basis.
Section 1.10 of T&R’s report on Resource Accounting and Budgeting stated ‘The Treasury and Resources Department will report back to the States in the annual Budget Report and Account on progress and changes. Apart from a reference to the fact that this is the intention in the Minister’s Foreword, there is nothing in the States accounts that indicates any progress.
Whilst I appreciate that the introduction of resource accounting itself will be a major exercise I would urge the T&R Department to at least move some ways to producing accounts in accordance with generally accepted accounting principles and in proper accrual accounting, in particular.
I do have concerns regarding the time and resources that will be taken up in the developing of this plan and look forward to seeing more detailed costings, but I am happy to support this report, as amended.