Thursday, 12 November 2015

Budget decisions would benefit from stronger role for Houses of Oireachtas

Nuala Haughey: The revelation a few years ago that German parliamentarians were privy to vital Budget information withheld from our own lawmakers caused uproar on the opposition benches and beyond.

Since that episode in 2011, there have been changes to key aspects of how the annual budgetary process works in Ireland.

These include, for example, moves towards a ‘whole of year’ budgetary timetable; multi-annual budgeting; the publication of the Stability Programme Update and Spring Economic Statement in April; and the fact that Budget Day itself now takes place in mid-October instead of December.

However, there has been little change in relation to one fundamental aspect of the Irish Budget process – the weakness of parliamentary deliberation, oversight and scrutiny of the executive’s annual efforts to raise and spend public funds

In addition, despite efforts to open up the Budget process – including the two-day National Economic Dialogue held for the first time last summer – the formulation of the annual Budget remains largely a bureaucratic insider process.

This is at odds with international trends towards more open government (Ireland joined the Open Government Partnership in 2014) and programmes to include ordinary people in deciding how public funds are spent through participatory budgeting.

When it comes to the budgeting process in particular, the level and nature of the engagement of the Houses of the Oireachtas is very low by international standards. The index below is a composite metric that compares the budgetary power of national legislatures across countries, based on a range of criteria including time for scrutiny and committee capacity. Ireland is at the bottom of this ranking, while other countries which are also based on the Westminster model of parliamentary democracy also perform poorly.

Index of Legislative Budget Institutions

Legislatures and the Budget Process: The myth of Fiscal Control, 
Joachim Wehner (London School of Economics), 2010 Palgrave Macmillan

This data is from 2010, but in OECD research published in 2015, which uses a slightly different methodology, Ireland still ranked 54th out of 60 countries.

The OECD this week produced a thorough and nuanced report which contains a challenging and ambitious set of proposals to enhance parliamentary scrutiny, oversight and engagement with the budgetary process

The Review of Budget Oversight by Parliament: Ireland describes the existing model of parliamentary interaction with the Budget process in Ireland as a “disconnected series of annual set-piece events”.

The analysis was commissioned by the Houses of the Oireachtas Secretariat and the report’s authors, including former Irish Department of Finance official Ronnie Downes, interviewed a range of stakeholders during a trip to Dublin last summer.

The report highlights a series of weaknesses in our laws, institutions and political culture, including:

  • Lack of pre-Budget engagement by the executive with the Dáil and its committees, with key decisions presented as faits accomplis on Budget Day.
  • Limitations in the legislative scrutiny of the Finance and Social Welfare Bills – Irish parliamentarians have weeks to scrutinise these complex pieces of legislation, whereas parliamentarians in Germany, Scotland, Sweden, the US and Canada have at least three months to get to grips with budgetary legislation before putting it to a vote.
  • Lack of detailed Estimates and performance information at the time of the Budget – these only appear when the REV (Revised Estimates) are published two months after Budget day.
  • Lack of meaningful debate and discussion on the Estimates – the formal powers of committees are weak – they “rubber stamp” government Budget proposals, with no powers to accept or reject the Estimates, nor to recommend changes.
  • Lack of willingness and/or capacity of parliamentarians themselves to engage in the Budget process, and lack of specialist analytical support to help them.

The report’s authors acknowledge that there is no one-size-fits-all approach to raising, allocating and authorising public resources. They are also sensitive to legal, cultural and national traditions, including the Constitutional prerogative of the Irish government to bring forward spending and tax proposals.

Working within these parameters, the OECD has nevertheless come up with a strong set of tailored proposals that seek to build on budgetary reforms of recent years and maximise opportunities within the EU calendar.

The proposals include procedural changes to use parliamentary time more effectively and deepen its engagement with the Budget both before and after Budget Day. In this area, for example, the report proposes the establishment of a new Estimates Committee as a plenary forum to drive whole of year engagement.

The need for much improved information to aid performance-based scrutiny of the Estimates is also a strong recommendation, with the report suggesting a systematic review of existing performance metrics and the introduction of a National Performance Framework.

Among the institutional supports put forward is the establishment of an Irish Parliamentary Budget Office as a technical and non-partisan unit to carry out analysis of information and policy costings.

Taken together – and these proposals do indeed come as a job lot – the OECD’s 16 proposals offer a strong roadmap for reform. Of course, the reforms would themselves have budgetary implications.

But more than that, they would require the executive to cede power, parliamentarians to commit time and effort, and the civil service to change its work practices.

Fundamentally, these reforms are about mature and critical engagement of the parliament with the executive about how public money is raised and spent.

This engagement does not simply entail, as the report notes, displacing the views of the executive branch with the views of parliamentarians; but rather ensuring that the legitimate views and insights of parliamentarians are brought to bear upon budget deliberations.

Review of budget oversight by parliament: Ireland, Public Governance and Territorial Development Directorate Budgeting and Public Expenditures, Preliminary Draft, Autumn 2015

Nuala Haughey is Open Govenment Project Manager with TASC.

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