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Kestutis Rekerta Strategic Planning Division, Government Office of Lithuania

World Bank Workshop, Bratislava, September 6, 2006

STRATEGIC PLANNING IN LITHUANIA

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Factors that determined the introduction of strategic planning

Poor state financial situation in 1997-1999 current account deficit – 12 % fiscal deficit – 11 % in 1997 Government stock interest rate - 12–14 %

International public sector development trends New Public Management – UK, USA, New Zealand, Canada, Sweden, etc. strategic planning (management) as a way to manage performance and finance

Support of the Canadian Government negotiations regarding Canada-Lithuania Public Administration Reform Project

started in 1997-1998

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Today‘s situation

The annual government deficit 0, 5 % GDP in 2005 (convergence criteria 3 %)

Government debt 18, 8 % GDP in 2005 (convergence criteria 60 %)

Inflation rate 2, 7 % in April 2006 (convergence criteria 2, 6 %) Government long-term interest rates 3, 8 % (convergence

criteria 6 %) Participation in new exchange-rate mechanism (ERM II) from

2004 Country’s credit rating is A (Standard and Poor’s 15 June 2006)

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Canada-Lithuania PAR project (1998-2003)

Project objectives:1. To introduce a strategic planning model across government 2. To improve the Government’s decision-making system

Canadian project participants:Ontario Cabinet Office, Prime Minister’s Office,Ontario Public Service, Canadian Institute of Public Administration

Lithuanian project participants Government Office, Prime Minister’s Advisers, ministries, Government Agencies and other public sector organisations

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Reform stages

1999-2002: implementation of strategic planning 1999 – pilot projects in 5 ministries 2000 and later – budgeting process follows the principles of strategic

planning and program budgeting acros all public institutions

2003-2004: implementation of impact assessment up to 2003 – positive and negative impacts on the society is assessed of

only those proposals submitted to the Strategic Planning Committee since 2003 – impact of all Government proposals is assessed following

the recommendations of the impact assessment manual

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Main accomplishments (1)

Strategic planning as a planning and management tool is institutionalised in the following documents: Law on Government

Law on budget

Procedures for the preparation and implementation of state and local government budgets

Annual budget formation calendar

Strategic planning manual

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Main accomplishments (2)

Cabinet Strategic Planning Committee established and functioning

Strategic planning manual approved in 2000 (revised in 2002 and 2004), obligatory for all appropriation managers and recommended to the municipalities

Ministry and Government Agency strategic activity plans approved by the Government beginning 2001

Ministry strategic activity plans published (on the Internet) and available to society

Procedures for the monitoring of program implementation approved in 2001; institutions report for the implementation of tasks foreseen in the plans

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New reporting requirements approved in 2002; institutions report on the progress achieved implementing strategic activity plans

2002 budget accounts report submitted together with performance measures and allowed to compare planned and achieved results Strategic planning working group established and headed by the Government Chancellor; its mandate is to improve strategic planning process

Long-term state development strategy approved by Parliament in 2002

Commission for the monitoring of the implementation of Long-term state development strategy established in 2003

Impact assessment manual approved in 2003; obligatory for all proposals submitted to the Government

Main accomplishments (3)

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Ministries, Government Agencies and counties established Internal audit units; Internal audit guidelines approved by the minister of finance

Since 2004 Internal audit units are being established in municipalities

Municipalities started to implement strategic planning into their activity and apply the approved manual

Main accomplishments (4)

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The Structure:Integrated Planning and Budgeting

Strategic PlanningCommittee

Cabinet

Ministry ofFinance

Chancellery: Planning Unit

Line Ministries

new

new

Ministry strategic planning group, internal auditors

Ministry strategies

achieve mission and goals, and

address potential risks

Government’s strategic priorities

contribute to ministry mission

and goals

Achieving Results:Performance Measures

ministry mission

ministry strategic goals

programs

program goals

objectives

activities

Ministry Planning

Ministry Strategic Planning Process

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The Model: Integrated Planning and Budgeting

Set Government Strategic Priorities

Evaluate Results,Review Strategies & Environmental Scan

Set Fiscal Strategy,Set Ministry

Planning Allocations

Monitor Legislation& Budgets; Adjust If

Required

Ongoing:Review Macroeconomic &

Fiscal Indicators;Update Fiscal Plan

Approve MinistryStrategic Activity

Plans

Approve Draft Budget,Approve Legislative

Program

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Integrated Planning Model

Strategic Activity Plan

Pro

gra

m

No

.1

Pro

gra

m

No

…

Strategic Activity Plan

Pro

gra

m

No

.1

Pro

gra

m

No

…Strategic

Activity Plan

Pro

gra

m

No

.1

Pro

gra

m

No

…

Long-Term Goals (vision)

(more than 6 years)

Mid-Term Goals

(3 to 6 years)

Short-Term Goals

(1 to 3 years)

Strategic Framework Documents:

• Economic Strategy• Regions’ development plans• EU accession & NATO Documents

(NDP, NPAA, NNIP, PEP)

Fiscal Strategy and Ministry Ceilings

Government’s Strategic Priorities

Sec

tor S

trategy

Sec

tor S

trategy

Sec

tor S

trategy

Long-Term State Development

Strategy

Geopolitical situationLong-term prioritiesLong-term vision for sectors

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Factors Stimulating the Reform

Strong political will Standing body to lead and review the reform Qualified civil servants Aspiration for European integration Institutionalisation of reform results Attitude of the society towards public administration Poor financial situation of the state

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On-going improvement and challenges for the future

Integration of different planning processes:- Single Programming Document (integrate into existing programs)- Plan for the Enhancement of Administrative Capacities- Integration of the information society development

Better performance measures

Improved quality of strategic activity plans

Decreased number of strategic business plans (i.e. to decrease the number of appropriations managers)

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On-going improvement and challenges for the future

Coordination of subordinate agencies’ performance (ministries approve their subordinate agencies’ plans)

Alignment of institutional goals, objectives and performance measures with departmental and individual performance measures

Alignment of individual performance appraisal with motivation of public servants

Alignment of individual performance appraisal with improvement of competencies and qualifications

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Possible ways to improve

Recommendations on how to devise performance measures

Training of civil servants

Departmental and individual plans with expected targets; reporting on the progress

Performance contracts between heads of units and their subordinates