Performance-Informed Budgeting in Flanders, Belgium

Executive summary

The Flemish budgeting framework is distinguished by the region's strong commitment to implement performance-informed budgeting practices, with a significant emphasis on increasing the efficiency of resource allocation through spending reviews and supporting informed budget decisions through performance budgeting reforms. Performance-informed budgeting is legally embedded in Flanders, further emphasising the strong commitment to reform. The Flemish government is committed to maintaining sound public finances and sustaining structural growth in the region. Flanders outlined a budgetary plan for returning to a balanced budget by 2027.

Over a relatively short time, Flanders has made significant efforts to implement performance-informed budgeting practices by conducting a pilot spending review, completing two rounds of broad comprehensive reviews, and continuing efforts to conduct in-depth spending reviews. In addition, the Flemish authorities are taking steps to increase the availability of performance information and to strengthen the medium-term budget framework by introducing expenditure benchmarks. All of this demonstrates a strong commitment to increasing public sector efficiency and accountability.

Despite these efforts, certain challenges persist. The budgeting process in Flanders is still primarily input-oriented: the discussion between the Department of Finance and Budget and other departments mainly focuses on how much funding departments will get and decision makers make limited use of available performance information. At the same time, while efforts have been made to integrate broad comprehensive reviews with the budget process, the results of these reviews have not been available before the beginning of the budget cycle, making it difficult to consider the results of the reviews as part of the budget process.

It is important to address these challenges and build on progress made to strengthen the approach to performance budgeting and spending reviews in Flanders. To this end, the OECD has assessed the approach to performance-informed budgeting in Flanders, concluding with six key recommendations and related actions to further strengthen the framework.

Key recommendations

Based on its assessment, the OECD has developed six key recommendations and associated actions to strengthen the Flemish performance-informed practices.

1. Strengthen the link between spending reviews and the budget process

• Ensure that results of broad comprehensive reviews and in-depth spending reviews are ready before the budget negotiations phase starts in March.

• Allow smaller in-depth spending reviews to run on a rolling basis during the same year.

• Ensure that spending review recommendations are reflected in the budget and over the medium term by analysing budget trends and performance information.

2. Improve the quality of performance information developed by departments

• Improve the links between performance objectives and performance indicators by presenting performance indicators alongside performance objectives in summary tables in the Policy and Budgetary Explanation Notes (BBTs) and ensure indicators measure progress towards achieving objectives.

• Put a limit on the number of performance objectives and indicators to be included in the BBTs (1-2 strategic objectives per policy field, up to 4 operational objectives per strategic objective and 1-2 performance indicators per operational objective).

• Ensure quality assurance of performance information by discussing the relevance and consistency of performance information presented by departments.

3. Improve the presentation of performance information

• Reduce the volume of BBTs by including only relevant information and keeping detailed breakdowns of information for internal purposes that can be provided upon request.

• Use standardised and binding templates to present performance information in the BBTs and update them regularly based on feedback from stakeholders.

• Once available, integrate the template into the IT systems to facilitate data collection and monitoring efforts.

4. Strengthen the role of the parliamentary budget committee and sectoral committees in scrutinising performance information

• The budget committee should be responsible for discussing the main aspects of the budget but delegate responsibility to sectoral committees for scrutinising relevant performance information.

• Sectoral committees should engage with departments on the performance information they present and hold them accountable for what is presented.

• Present information on the results achieved by policy domains to Parliament during an Accountability Day in early Spring.

5. Communicate budget developments and performance information to a broader audience to create a performance culture and ensure accountability

• Develop a “budget at a glance” to present the key aspects of the budget in an accessible manner.

• Include a statement from the government on the key priorities for the fiscal year and on key aspects of the budget in the “budget at a glance” and make use of infographics and other visual aids.

• Once relevant IT systems are developed, develop interactive dashboards where stakeholders can build tables and download performance information in accessible formats.

6. Strengthen capacities within the administration for performance-informed budgeting practices

• Gradually build up capacities to conduct broad comprehensive reviews and in-depth spending reviews in-house to ensure ownership of the results.

• Hold an information session at the launch of the broad comprehensive reviews when working groups are formed to explain the process and provide a platform to ask questions.

• Develop a leaflet on performance-informed budgeting, which includes the key concepts, ways to use performance information and glossary of the key terms and distribute it to decision makers.

• Create a team of 2-3 policy analysts within the Department of Finance and Budget that co-ordinates the spending review efforts across the administration and engages with departments on the quality of performance information and other operational elements related to the reform.

• Establish a performance-informed budgeting community to exchange on the progress made and gaps to be addressed.