EU4PFM promotes best practices of the European Union in government strategic planning

On 11–12 October 2021, representatives of the Secretariat of the Cabinet of Ministers of Ukraine, staff of the Ministry of Finance of Ukraine, and the Ministry of Economy of Ukraine took part in a training seminar on strategic planning and performance management.

Jurgita Domeikienė, EU4PFM Team Leader and International Key Expert on HR/PAR, welcomed the participants. “One of the activities of EU4PFM is to support the Ministry of Finance of Ukraine in improving organizational management processes”, said Jurgita Domeikienė. “The training has covered not only theoretical knowledge in the field of strategic planning but also how this process was implemented by the governments of several European countries at the national and organizational levels, and what was the way to success. All speakers have a different experience, so this is an opportunity to look at these processes from different points of view.”

Rastislav Vrbensky (Slovakia), Inga Antanaitė (Lithuania), Rainer Osanik (Estonia), Jan Marusinec (Slovakia), international experts on HR/PAR of the EU4PFM project, shared their experience in implementing strategic planning by the EU governments.

“In essence, the process of strategic planning is a process of defining goals and assessing how best to achieve them”, said Rastislav Vrbensky. During the training, he focused on the classic cycle of strategic planning, how to create the mission, values, and vision of the institution, how to define the goals and objectives, how to conduct strategic assessments and risk management, and what determines the prioritization and measurement of performance and efficacy of plans implementation.

According to Inga Antanaitė, strategic planning in Lithuania began in 1999 with the launch of this process in five ministries, and in 2002, the methodology, which became the basic strategy document for all ministries and departments, was approved under Government Resolution. This document covers all components of performance management, including strategic planning, performance monitoring, and evaluation. In addition, the Government has approved a Guidance on Developing Performance Indicators and a Guide to Programme Evaluation.  The Strategic Planning Committee comprised of 10 ministries and chaired by the Prime Minister of Lithuania is currently working in the country at the governmental level, and a comprehensive strategic planning system is in place.

 According to Inga Antanaitė, a new stage of reforms in this field in Lithuania is a budget system reform aimed at developing rational medium-term budgeting principles related to the strategic planning system.

“The new law on strategic governance regulates the result-oriented strategic management system, develops principles, determines the types of documents on strategic planning, their relationship and impact on action planning funds, defines goals and key aspects of strategic management for 10 years, requires the implementation of strategic goals and objectives in national development programs, which allow to plan financial resources for achieving them”, said Inga Antanaitė. 

While the Government ensures coordination of the system of strategic management as a whole, development of state action strategy, implementation of government programs, development of annual government priorities and coordination of their implementation, etc., the Ministry of Finance ensures coordination of national action programs, studies draft strategic plans for necessary allocations based on fiscal indicators, ensures operational performance monitoring, etc.

In Lithuania, all national strategic goals and intermediate development goals of the country are set out in the National Action Plan for 2021–2030, and the effectiveness of its implementation is measured through an automated monitoring system implemented by the Ministry of Finance of Lithuania.

Estonia also has its national development plan for the period until 2035.

As Rainer Osanik noted during the event, strategic planning in Estonia for 2021–2035 provides an opportunity to create a realistic long-term development plan for various industries and regions and is the basis for ensuring integrity in the process of change.

The strategic planning process for the following periods allows continuing the most important activities from the current plans while taking into account current trends, challenges in a changing world, new strategic paths, and the opinion of partners.

The process of agreeing on new strategic goals has lasted in Estonia for two years. Almost 17,000 people have contributed to this process.

“The strategic goals are based on the values ​​that are the basis for the country’s strategic decisions and the implementation of which is facilitated by all documents of Estonian strategic development,” said Rainer Osanik. “They are also taken into account in the state budget strategy and in the preparation of the government’s action plan”.

To achieve its goals, the Government takes into account Estonia’s development needs, global trends, the European Union’s policy framework, and the global Sustainable Development Goals set by the UN.

Within the framework of strategic planning and financial management of the countries, Estonia-2035 plays a central role as a tool for a long-term strategy for the development of countries and cross-sectoral coordination.

For example, the Estonia-2035 Strategy is the basis for a long-term reform plan for Estonia, for planning the use of EU funds for the next period, etc.

This global document has also become the basis for the development plans in various areas and ministerial programs.

During the event, Rainer Osanik shared Estonia’s experience in other aspects of strategic planning, in particular, the procedure for adopting documents and decision-making; what happens to strategies when governments change; how contradictions are resolved; how areas of responsibility are delineated between branches of government; what is the procedure for implementing documents at the level of certain ministries, etc.

Jan Marusinec revealed the complex process of change in Slovakia, which, according to him, was not so cloudless, but due to mistakes the country has reached the current state of strategic planning. Unlike Lithuania, the legal framework for strategic planning is unconsolidated. The country has not adopted special laws on strategic planning, and no special institutions have been established to guide the process. The development of strategic documents in Slovakia is governed only by government procedural rules. Among the advantages, there is a single methodology for assessing the impact (fiscal, social, economic, and environmental) in the event of a proposal to implement a new policy of change.

In Slovakia, there is also an online platform for the implementation of the procedure for the interagency exchange of opinions, where each policy document is provided for comment to ministries and the public.

2016 was a turning point for Slovakia in the institutionalization of initiatives for the rational use of funds. In the run-up to the election, three officials and a scholar published an article proposing a new approach to public finance management through data-driven decision-making and rational resource management.

After the election, one of them became the chief economist in the Ministry of Finance, and the Minister of Finance gave the “green light” to this bottom-up reform initiative.

Legislative and institutional changes have been adopted to implement the regular practice of targeted cost analysis.

The Ministry of Finance has established a unit on the efficient use of funds, which is responsible for cost analysis, as well as an investment unit, which is responsible for analyzing the expected costs and benefits of investment projects worth more than 1 million euros. Each ministry has a network of analytical departments, one of the key tasks of which is to increase the effectiveness of sectoral policies.

“This reform has strengthened the Government’s ability to implement informed decisions and has allowed it to focus on the rational use of funds,” said Jan Maruszynec. “The current challenges are to improve the performance monitoring system (KPIs, comparative analysis on the examples of similar countries), intensive work with line ministries and their departments.”

At the same time, Jan Marusinec advises adding the principles of the EU financial management to the national methodology, not to complicate the EU requirements with additional internal rules to prevent fraud, for example, because it significantly slows down the implementation of the program. He also advises not to create separate management structures, although at first, such an approach may seem easier, because in the long run, it creates confusion and increases costs. The participants of the meeting had the opportunity to get answers to the questions and share their own experiences.

Let’s implement changes together!