Spending cuts at executive organisations
We have audited the spending cuts being made at executive organisations that carry on a public task, such as the public broadcasting organisation, the Employee Insurance Agency, the Tax and Customs Administration, Rijkswaterstaat, the State Forest Service, etc. It is exceedingly important that public services are provided effectively and efficiently: public confidence in the government stands or falls on the public's direct contact with the organisations that provide public services. We asked what consequences the spending cuts at executive organisations in recent years had had on the efficiency, effectiveness and quality of the provision of public services. Can the same tasks be carried out with less money or are cuts in services inevitable? We audited the situation at 22 executive organisations. Our audit report includes a fact sheet on each of the organisations.
Services can be provided more efficiently but are often more sober
It emerged from the interviews we held with the executive organisations that they could often provide services more efficiently. It is uncertain, however, how much room there still is to increase efficiency even further to meet the spending cuts. With so many services being provided, it is not unthinkable that increased efficiency will not be the only outcome. It is sometimes decided to cut back on the services. No records are being kept of the impact that spending cuts are having on the services provided by executive organisations. Policymakers are not always fully aware of how the spending cuts 'hit home' (do they have the intended impact?). There is therefore a risk that spending cuts will have unintended consequences.
Spending cuts at executive organisations are not always made in a responsible manner
We think it is important that spending cuts and reforms are made in a responsible manner so that it is clear what the government counts or no longer counts as a public service. We found that some of the organisations we audited had been reasonably successful. In these cases, the ministry had consulted the organisation on the best way to organise its service provision and state funding of the organisation had been based on joint calculations of the achievable spending cuts. But responsible spending cuts also imply that management must make decisions and inform the House of Representatives of them, especially if the decisions have consequences for policy implementation for the services provided to the public and enterprises. Not all the organisations come up to this standard.
We recommend that the government always clearly state what consequences any future spending cuts will have on the executive organisations, how efficiency gains can be achieved and whether public services should be made more sober or withdrawn. This should clarify the situation for the benefit of individual executive organisations. We also recommend that the government include a separate chapter entitled Ministerial Executive Organisations in future ministerial budgets to disclose all plans to cut funding for the executive organisations. Finally, we recommend that the government explain in its annual report what spending cuts have been made at executive organisations and what measures have been taken to cut spending in a responsible manner.
The Minister of Finance wrote that a recent amendment to the Central Government Budget Regulations would clarify the extent to which executive organisations had made spending cuts: as from 2012 agencies will be obliged to disclose in their annual reports what measures they have taken to cut spending. Ministers will ask the autonomous administrative authorities and legal persons with statutory tasks that report to them to do the same. The minister further wrote that our recommendation to include a separate chapter in the budgets to set out all proposed spending cuts at executive organisations could be fulfilled by means of existing regulations and instruments. The minister did not think there was a risk that targeted efficiency gains could be achieved only through changes in service provision or the provision of more sober services. Such changes, he thought, were always the outcome of political or administrative considerations. The minister also thought that the achievement of spending cuts at executive organisations could not be reported upon within the current budgetary framework.