Ministry of Finance addresses the Government for public expenditure review
The Ministry of Finance formally addressed the Government, submitting the draft minutes of the meeting on the management of public expenditure growth. It proposes a review of the network and functions of public sector bodies, the use of state assets and indexed expenditure regimes.
"Given the increased public financing needs, with expenditure growing much faster than revenue, it is necessary to look for opportunities to ensure a more sustainable balance between budget revenue and expenditure. Fiscal discipline requires a consistent assessment not only of Sate revenue, but also of how budget funds are used. We want public spending to be based on real demand and its growth aligned with financial opportunities. This would help to ensure a more sustainable budget balance and preserve the ability to finance the key priorities of the State," Minister of Finance Taurimas Valys says.
Network and functions of public sector bodies
The Ministry of Finance proposes entrusting ministries with the task of assessing the network of budgetary and public bodies in their area of governance and the functions they perform. The aim would be to determine which activities can be abandoned if they are not necessary for the achievement of the main objectives of the State, duplicate or are excessive.
Ministries should draw up and submit to the Office of the Government concrete action plans for savings in the State budget. They would provide for institutions that can be reorganised, wound up or changed in their legal form when performing narrow, redundant or duplicative functions. It is also proposed to eliminate unnecessary activities at the national level.
The action plans should also include a reduction in the number of positions related to the bodies to be abolished and the functions to be retired, and an estimate of the savings to be made to the State budget as a result.
Use of State assets
Ministries are also invited to assess whether the assets held by institutions in their area of governance is necessary for the performance of their functions and whether it is used efficiently. They should present action plans setting out what unnecessary or surplus assets would be abandoned, what is proposed to be sold or leased, and how to improve the management of the remaining assets.
Procedure for automatic expenditure indexation
The Ministry of Finance also proposes a revision of the legislation under which certain public expenditure automatically increases as a result of past commitments or is linked to macroeconomic indicators.