Result-driven budgeting models for Luxembourg institutions


Result-driven budgeting models for Luxembourg institutions

Executive Summary

Inspired by the OECD recommendations and EU Stability & Growth pact (i.e. regulation n° 1466/97 and 1467/97, originated in the Maastricht treaty), as well as by the European Member States (i.e. the United Kingdom in 1988, the Netherlands in 1994) pioneers in its application, the result-driven budgeting model aims at reinforcing the performance of the services funding in relation with assigned objectives. The challenges emerging from the last global financial crisis and from the new economy have increased the focus on budget controls and expenditure reductions, and transformed the citizens’ expectations in terms of quality of services.

It becomes clear that traditional budgeting processes no longer effectively serve the business objectives within public organizations.
Elected representatives and management staff do not have to look far in a typical public organization to find representatives of the Government, Chamber of Deputies or municipalities and state bodies who see little value in their current budgeting activities. While from a finance perspective, improving the budgeting process regularly figures on the agenda of the Head of Finance, significant change is rare in practice as inadequate management culture and limited standard technology capabilities are inhibitors of budgeting effectiveness.

In the effort to understand the reason for much of this frustration and why so little progress or changes have been made, we take the opportunity of this article to present Deloitte’s view on the new budgeting model which does not have to be a source of pain and dissatisfaction, but more a source of effectiveness and efficiency.

Inside magazine Special Edition - Public Sector, December 2015

This special edition includes a variety of topics related to development such as social progress, healthcare and education, and describes issues related to resource efficiency from a demographic and societal perspective.

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