The reform of the Strategic Planning and Budgeting

The reform of the Strategic Planning and Budgeting

The Ministry of Finance of Lithuania together with Office of the Government of Lithuania and CPMA are implementing the reform of the Strategic Planning and Budgeting. The purpose of this reform is to develop a more reliable and better-quality system of strategic planning, to strengthen performance budgeting, medium-term expenditure management and program management, with the aim to ensure redistribution and execution of public finances in accordance to the needs for the sustainable socio-economic development of Lithuania and to promote result orientation.

In the area of Strategic Planning it is planned to create a new model of the strategic planning system which will cover and connect national, regional and territorial planning processes. The new model of the strategic planning system will eliminate the drawbacks of the existing system – excessive strategic planning documents, lack of connection between them, a huge number of performance indicators which are not well monitored. Also it is planned to strengthen accountability and reporting of performance in every level and strengthen the linkage of performance information to budget planning.

In the area of budgeting it is planned to review and update the rules for programme budgeting, change the structure of programmes, introduce policy areas. It is also foreseen to link a new medium-term (3-4 year) budget structure with a new strategic planning document system by establishing clear connections between budget programmes and strategic documents, also by linking the performance indicators set in the budget and strategic documents. Public expenditure review tools will be also strengthened and integrated into the budgeting process.

Processes of assessing and selecting investment projects are also reviewed and updated. All investment projects have to be thoroughly assessed by comparing possible alternatives, by applying life-cycle cost analysis, carrying out impact assessments and selecting the most appropriate source of funding.

In pursuit of better accountability, higher transparency, and higher involvement of public and decision-makers in budgeting processes, the quality and openness of budget documentation will be increased. Also it is planned to issue Citizens Budget which will provide budget information in a simple manner.

The reform of the Strategic Planning and Budgeting in Lithuania is projected to be implemented by the beginning of 2021.

Last updated: 14 06 2018