PRB: Compensation for improved service delivery?

The Minister of Finance is saying that the Pay Research Bureau’ s awards will be costing us yearly some Rs 9000 per worker. This statement does not allow us to form an opinion as to whether the compensation of about Rs 5.5 billion rupees to the civil servants is justifiable; the PRB award is a combination of compensation for the loss of purchasing power and for improvement in the productivity of the public sector worker. We have to examine the rewards of government workers vis-à-vis their output or their service delivery. So the discussion should not be focusing on what is the cost to the economy or the taxpayer but whether the compensation to the civil servant relative to his improved productivity is excessive or not? Does he deserve it?

If we scrutinize the PRB awards along these lines, it seems that the Ministry of Finance (MOFED) wants to have it both ways – have the cake and eat it too. MOFED has been bombarding us with a volley of documents and reports informing us that we have already moved to performance-based budgeting and that there has been an improvement in service delivery. Since 2007, Mauritius has been implementing a budget management process that links allocation of public resources to clear outputs and agreed outcomes, and provides a framework for reporting on results. There has been a shift from a culture of administration to a culture of results.

The 2010 Public Expenditure and Financial Accountability (PEFA) assessment has shown that Mauritius continued to perform well against many of the PEFA benchmarks. The Director of Audit has noted several areas of progress in the implementation of the PBB reform, including the stabilization of the budget presentation format, a wider understanding of concepts like outcomes, services to be provided (outputs) service standards (indicators), and improvements in programme costing. Both the IMF and CABRI (Collaborative Africa Budget Reform Initiative) have also noted that the Progarmme Based Budgeting (PBB) has made a noticeable impact on budgetary processes including flexibility and ownership, better resource allocation, performance orientation and transparency. They have made recommendations on how to consolidate the PBB process and further develop the monitoring and evaluation of service delivery in relation to spending.

As regards monitoring and evaluation of service delivery, the PBB estimates (that document that has the size of a phonebook and accompanies the budget speech) document details out the major achievements of all ministries/departments and the performance information on service standards through their Key Performance Indicators – KPIs. If we go through each of these achievements and KPIs – the Part A in the ministries/department budget programmes — we will realize that most of the ministries and departments have completed more than 75% of their KPIs, and more than 85 % of budget measures have been executed, meaning that they have been above average standards in terms of service delivery. We can thus safely conclude that our civil service is on target in terms of service delivery and that this improved performance had been aptly rewarded by the PRB. Can we?

However, there are some lousy critics who have the bad habit of turning received wisdom on its head. They point to continuous failures of the public sector namely on hedging, the Jin Fei, the financial scams, dubious Microsoft deals, badly prepared tenders; on the Public Sector Investment Programme that cannot properly prioritize projects, the over-investment in roads, the poor implementation of projects; the wastages and delays and the huge cost overruns; the absence of proper monitoring, the lack of planning, coordination and cohesion and absence of strategic long term vision or strategies to channel public investments to the education sector, to building skills, to research and innovation and to export expansion and diversification; on the MID project which is not taking off and absence of policy dynamism whether in the tourism, ICT, food and energy sectors.

It is the same critics who are quite forceful in their views on the PBB. They agree with the views of the Minister of Finance about a performance-oriented civil service and are very doubtful of the Program-Based Budget which, they say, is turning out to be another bluff –a mere wish-list. It has remained a theoretical tool and does not provide concrete and practical policies and programmes conducive to making Mauritius a performance-enhancing economy. The reason is that the PBB has been reduced to a mere arithmetical instrument over-focusing on expenditure control. They believe that no significant budgetary reforms are likely to succeed unless a robust and functioning accounting, reporting, monitoring, evaluation and implementation facilitator/delivering system is in place. And they also propose that there is an upgrade in the system of evaluation of projects and programs which is quite weak in many ministries.

Evaluation generally takes the form of financial audits. Few examples of engineering and quality control assessments for major capital projects exist. Similarly, there are rare examples of cost effectiveness studies. The Project Plan Committee (PPC) unfortunately does not foot the bill. Attempting performance audits without agreed performance benchmarks and proper systems to record, and track and evaluate performance is equally unlikely to be effective. These are some of the basics that must be satisfied for the PBB to be effective — “real” performance and policy-based budgeting — a PBB that secures delivery of government’s major domestic policy priorities.

Until we have a better system to benchmark performance in the public sector, the jury is still out as to whether the PRB awards are justifiable or not relative to the service delivery/productivity of government workers. And MOFED is not in a position to help us on that, now!

* Published in print edition on 31 May 2013