1. 0 Kestutis Rekerta Strategic Planning Division, Government Office of Lithuania World Bank Workshop, Bratislava, September 6, 2006 STRATEGIC PLANNING IN LITHUANIA

2. 1 Factors that determined the introduction of strategic planning  P oor 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

3. 2 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)

4. 3 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

5. 4 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

6. 5 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

7. 6 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

8. 7  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)

9. 8  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)

10. 9 The Structure: Integrated Planning and Budgeting Strategic Planning Committee Cabinet Ministry of Finance Chancellery: Planning Unit Line Ministries new

11. 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

12. 11 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 Ministry Strategic Activity Plans Approve Draft Budget, Approve Legislative Program

13. 12 Integrated Planning Model Strategic Activity Plan Program No.1 Program No… Strategic Activity Plan Program No.1 Program No… Strategic Activity Plan Program No.1 Program 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 Sector Strategy Long-Term State Development Strategy Geopolitical situation Long-term priorities Long-term vision for sectors

14. 13 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

15. 14 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)

16. 15 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

17. 16 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