Translated material
State program of programs
The government begins the transition to new budgeting rules
The government is completely ready to transition to a new format of budget planning - state programs that will replace the currently existing federal target programs. Now the money will be distributed by area, and not just by department. Yesterday, at a meeting with Prime Minister Vladimir Putin, Deputy Prime Minister and Finance Minister Alexei Kudrin said that already in next year’s budget, 40 programs in five key areas will be presented in analytical form. It is proposed to approve the 2012 financial plan in a new form. The authors of the idea believe that this will make the budget more transparent. However, experts point out that such a technical reform will not be able to solve the main problem - the inefficiency of government spending.At the working meeting, the Minister of Finance outlined the main idea of the new format for working on the budget. It has been discussed for many years and, as promised, it was actually implemented in the work on the 2011 budget. “The Ministry of Economic Development organized the work of all ministries together with the Ministry of Finance and submitted to the government a list of state programs that will now determine all the main directions of economic and social policy,” said Mr. Kudrin.
The responsible departments have identified 40 programs, which, in their opinion, include all areas of the state’s socio-economic policy. The programs are combined into five blocks - a new quality of life (12 programs), innovative development and modernization of the economy (17 programs), ensuring national security and defense capability (two programs), balanced regional development (four programs) and an effective state (five programs).
As the head of the Ministry of Finance told the prime minister, slightly less than half (46%) of all federal budget expenditures, approximately 4.76 trillion rubles, are concentrated in the first direction (in fact, the entire social sphere). It is planned to spend 1.785 trillion on innovation and modernization. Ensuring national security and defense capability will require 1.953 trillion rubles from the treasury.
The point of innovation is that now, despite the large number of departments that must spend government money, it will be possible to see how much is actually spent on specific areas. “After analyzing the funds of all ministries, it became clear that not only the Ministry of Health was involved in healthcare. Also the Ministry of Emergency Situations, and the Ministry of Defense, and others where departmental medicine is developed, for example, Rosatom,” Mr. Kudrin recalled and explained that because of this it was difficult to isolate how much is spent on healthcare in general. According to the new scheme, one ministry will be the coordinator of all funds, and there may be several executors of subprograms.
All materials have been agreed upon with all ministries and submitted for consideration by the government and approval by the prime minister. By April 15, 2011, the first versions of all programs, including goals and indicators, will be prepared. Preliminarily, state programs will be designed for approximately six years, some may reach a 15-year period, this depends on the speed of achieving key indicators.
According to the head of the Ministry of Finance, this is not just a clarification of the procedure for forming the budget, but a complex of all measures to achieve the relevant goals. “This is a reform of public administration,” Mr. Kudrin believes. The effectiveness of program implementation will be assessed based on intermediate results. “Together with the figure of the amount (of expenses. - Ed. ), the goal, the meaning of specific indicators that we will achieve will always be discussed,” explained the head of the Ministry of Finance.
Vladimir Putin made only one significant comment on Mr. Kudrin’s report: “We have been considering some issues for so long that they sometimes lose their relevance. It is necessary to pay serious attention to the efficiency of decision-making. Of course, issues must be carefully worked out with the expert community and parliament. But excessive bureaucracy sometimes interferes with business and reduces the efficiency of all government work.”
The main complaint of the expert community about the budget as a whole is the low efficiency of government spending. As Alexey Kudrin himself previously said, ineffective spending reaches half a trillion rubles annually. And the new budget does not contribute much to solving this problem. “I would like to believe that this can somehow help, but this is not the first time that the authorities are trying to make the budget more transparent. Previously, for the same purpose, we switched to federal target programs. There are serious doubts that a simple accounting change will seriously affect the main drawback - the inefficiency of government spending. Namely, this problem is the source of both the budget deficit and inflation. And it will not be possible to solve it simply by introducing a new classification. The solution lies in the sphere of the state’s economic policy, aimed primarily at reducing government spending,” believes Anton Struchenevsky, senior economist at Troika Dialog.