!
Layering, Drift, and Conversion:
The Results-Based Budget Process in Alberta 2012-2014.
Keith Brownsey
Mount Royal University
In her 2011 campaign for the leadership of the Alberta Progressive Conservative
Party, the former provincial Minister of Justice, Alison Redford, proposed a review
of all provincial programs of the Government of Alberta. Budget making in
Alberta, she stated, had to be based on more than the usual political arguments
about which programs were popular. A Redford-led Progressive Conservative
government would insist on evidence-based measures of program outcomes to
justify their continuation. First described as zero-based budgeting in her leadership
campaign for the Progressive Conservative Party in the summer of 2011, the
performance review would create savings which were to be used to help reduce the
deficit and balance the budget. After five years of multi-billion dollar deficits,
provincial finances had become a political issue with opposition parties demanding
a reduction in spending and balanced finances or new revenue sources to meet
increased demand for public goods from a growing population.
!
In a province that had seen dramatic spending and program cuts in the mid-1990s
under the Progressive Conservative government of Ralph Klein in an effort to align
revenue and spending, the five years of deficits was politically damaging to the
Progressive Conservative government. The program of zero-based budgeting was
viewed in the media as a way to reduce and eventually eliminate the provincial
deficit in the same way that the Klein government had used performance-based
budgeting as a justification for its austerity program of the mid-1990s. Moreover, it
would position Alison Redford as a fiscally responsible manager of public funds.
While zero-based budgeting policy may have been inspired by political motives, it
became a central feature of provincial fiscal management under the Progressive
Conservative government of Alison Redford.
!
One of the first acts of the Redford government in October 2011, was to begin
planning for a version of a zero-based budgeting model. Bill 1, The Results-Based
Budgeting Act was introduced in the provincial legislature in February 2012. Other
than the Speech from the Throne and the budget, Bill 1 was the only piece of
business put forward by the government. The Bill outlined the rational and
processes of fiscal and program review that would occur under the Results-Based
Budgeting Act. There would be three “cycles” of program review with
approximately one third of all provincial activity reviewed at one time. The various
provincial departments, boards, agencies and commissions would be assessed for
their relevance, effectiveness, and efficiency. Unlike previous program reviews
since the 1970s, the Results-Based Budgeting process was not advertised as a costcutting, downsizing exercise. It was, instead, an attempt to establish a new
approach to government budgeting which reflected the core programs and services
of the provincial state. Whatever the long-term impact of the Results-Based
Budgeting exercise, it has forced an examination of all government activity, broken
down barriers between departments, and led to an evaluation of the budgetary
process. While previous budgetary and program reviews had little effect on the
budget process other than a decrease in spending, the Results-Based Budgeting
model, if successful, would signal a shift in budgetary practice in Alberta.
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What is Results-Based Budgeting
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When a government makes a budget, it allocates scarce resources among a number
of competing demands. It is the role of a government in a Westminister
parliamentary system to choose among the many requests for funding for such
items as infrastructure, health care, and education to name only the most obvious.
The government must make choices which reflect its ideological, political, and
policy goals. Within this overall framework of decision-making, the treasury or
ministry/ department of finance, facilitates these political choices by co-ordinating
the spending of the multiple departments. In the Canadian provinces a department
of finance does not co-ordinate or control all of a government’s activity, but it does
control expenditures so as to achieve the desired outcomes chosen by the
government of the day. As part of the role of co-ordination the department of
finance is also the centre of economic policy. Whatever government may be in
office at a particular time, its responsibilities are much greater than simply “saving
the candle ends” as British Prime Minister William Gladstone put it in the 19th
century. Simply put, the treasury of any Westminster government is the central
agency for economic policy and government spending.
!
For most of the 20th century, the model of the budgetary process was viewed as a
dichotomous model, a division between spenders and guardians. This framework
saw treasury/ finance minister and officials as the guardians while the rest of the
cabinet and the civil service were, for the most part, the spenders. But as the state
sector grew, this model did not reflect adequately the reality of a multilateral
relationship among politicians, civil servants, financial watchdogs, interest groups,
think tanks, and academic and media commentators. The relationship among these
groups or stakeholders has transformed the simple cabinet debates about spending
priorities into a complex arrangement in which budgets are negotiated among
different groups, each concerned with its own area of interest. It is within this
multidimensional stakeholder model that various attempts have been made to
bring order out of confusion and to monitor and control spending. Beginning in the
late 1950s and early 1960s cost-benefit analysis studies of various state programs
aided decision makers in their efforts to propose and implement programs and
policy based on evidence. Other attempts to create evidence-based decision making
models in the public sector included Performance Outcomes, Planning, Program,
and Budgeting Systems (PPBS), Performance and Expenditure Management
Systems (PEMS), and a number of variants of performance management measures
such as zero-based budgeting, outcomes based management and others. As with the
various performance measurement models, Results-Based Budgeting (RBB) is an
attempt to integrate performance and results measures of public programs into
decision-making within the budget process.1
!
Results-Based Budgeting is designed “to connect government activities and funds”
to program outcomes. It is a tool for “measurement, evaluation, organizational
learning and incentives.” It is distinguished from performance reviews in that it
attempts to measure program outcomes. While performance reviews of public
programs are concerned with process, RBB is concerned with results. ResultsBased Budgeting attempts to link performance measures and budget allocations.
!
Although there is no one model for Results-Based Budgeting, there are several
common features which define the process. First, there is the concept of results or
outcomes. As defined by government, common objectives and outcomes are
established as policy. Second, results are measured to determine the degree to
which goals are achieved by an organization, program, or policy. Indicators such as
cost, workload allocation, quality of product or service, user satisfaction, and
accessibility of goods or services are used to determine results. What distinguishes
RBB from other performance evaluations is that the information must be used at all
stages of the budgeting process – from departmental allocations to the final budget
document prepared by the senior officials and political leaders. A third component
of Results-Based Budgeting is accountability and transparency. This requires the
budget making process to include reliable measures. The use of measures makes
officials more accountable for their actions. In a similar manner, if the measures of
programs and policy outcomes are released to the public political leaders are more
accountable to voters. A fourth characteristic of Results-Based Budgeting is the
connection between measurable outcomes and government policy. The linking of
results and objectives provides what several authors argue is a cohesive view of
1
Jessa Bedford, Results-based Budgeting in Alberta. Literature Review Culture of
Change Project, Edmonton March 2014. 1.
government programs. This type of strategic overview allows for a comprehensive
assessment of programs. A fifth characteristic of the RBB process is the
collaboration among government departments. While coordination of programs is
managed by central agencies such as treasury boards and departments of finance,
RBB presents an overview of programs and policies which would not otherwise be
apparent. The comprehensive framework of RBB allows governments to reform
structures and make assessments about the relevancy of existing programs.
!
Performance Review in Alberta:
!
When the Redford government announced plans for Results-Based Budgeting
assessment program spending in late fall 2011, it was viewed as another in a series
of program reviews which dated back to the 1970s.2 It was assumed that as the
announcement of a zero-based budgeting model was transformed into a ResultsBased Budgeting framework, that there would be little or no change in how
spending priorities were managed in Alberta. But performance management and
spending controls have a long history in the province. The volatility of oil and gas
revenues have forced the government to adopt a number of measures which
attempt to limit provincial spending, maintain a low-tax regime, and provide a
reasonably high level of public goods and services. With oil and gas revenues
rising and falling between 10 and 30 percent of provincial revenues, achieving the
three objectives has not always been easy. The unusually wide variation in revenue
from year-to-year has also been one of the reasons the province has seen – at least
since the election of the Progressive Conservatives in 1971 – a willingness on the
part of senior officials and their political masters to implement a number of efforts
to control provincial spending and conduct performance reviews of programs.
!
When the Progressive Conservatives came to government in 1971, the new
government, led by Peter Lougheed, began an institutional transformation.
Lougheed formalized the cabinet decision making process by creating a number of
cabinet committees. These committees were organized in an hierarchical fashion
with various policy committees reporting to both Board and the Agenda and
Priorities Committee. Almost immediately the new government was faced with the
sudden rise in oil prices with the first oil shock in October 1973. The focus of
policy discussion became a question of how to manage increased revenues from
the oil and gas sector. The first effort to stabilize provincial spending came in the
mid-1970s when the Lougheed government created the Heritage Savings Trust
2
Don Braid, “Zero-based budgeting fading to its proper size,” Calgary Herald, 2
February 2012, A4.
Fund while at the same time it implemented program budgeting to avoid
incremental spending increases. This was followed in the late 1980s by spending
reductions in almost every area under provincial jurisdiction.
!
Lougheed’s successor as premier in 1985, Don Getty, was faced with declining oil
and gas revenues. In a province dependent on the revenues from these nonrenewable resources, the fiscal situation was precarious. Although there was a
program review and an effort to reduce spending, the Getty Government produced
a series of multi-billion dollar deficits which created a provincial debt of over $20
billion. When Ralph Klein became premier in December 1992 two pieces of
legislation were introduced to address the province’s deteriorating fiscal situation.
Under the title of a “New Approach to Government,” the Progressive
Conservatives conducted a series of public consultations such as regional forums to
determine the roles and responsibilities of the provincial government as well as
introduced several pieces of legislation such as the Deficit Elimination Act and the
Financial Responsibility Act (FRA) in 1999 to provide a legal framework for future
budget decisions. The Klein Revolution, as the program of spending cuts came to
be known, also introduced a management control structure in 1993 for
departments. In 1995 the Government Accountability Act committed the province
to performance management review. As well, the Balanced Budget and Debt
Retirement Act was passed in 1995. This act called for the repayment of $8.3
billion of debt over 25 years.3
!
Along with the fiscal management legislation the Government Accountability Act,
1995 (GAA) mandated that all departments produce a three-year business plan that
stated its mission and goals. Targets were set in the business plans which were used
to measure performance. The Act also required a public accountability document –
Measuring Up – which would compare and contrast departmental programing to
the government’s strategic plan of fiscal deficit and debt reduction. Prepared by the
Provincial Controller, Measuring Up was designed to impress upon voters that
programs are being delivered in the most efficient manner possible. The Deficit
Elimination Act (DEA) also provided clear targets for spending which aided the
government in its pursuit of fiscal stability. The DEA was aided in this task by
effective “political leadership, effective communication with the electorate and
stakeholders,” and management processes that allowed public sector managers the
maximum amount of flexibility in the implementation of cost-cutting and financial
3 Al
O’Brien, “Expenditure Management in Alberta. In Search of Stability,” In David L.
Ryan ed. Boom and Bust Again. Policy Challenges for a Commodity Based Economy
(Edmonton: University of Alberta Press, 2013) 285-289.
regulation measures.4 The final effort made by the Klein government to manage its
finances came with amendments to the FRA in 2003. The amendments established
the Sustainability Fund, the Capital Account and the requirement for a consolidated
capital plan.5 These three changes to the act were designed to mitigate the worst
fluctuations in resource revenues.
!
Results-Based Budgeting in Alberta:
!
Although the provincial government had engaged in a number of program reviews
since the 1970s, and had made concerted efforts to control spending, the province
fell into a deficit during the 2008-09 fiscal year.6 Under a new Progressive
Conservative Premier, Ed Stelmach, the government decided to take funds out of
the Sustainability Fund. The Sustainability Fund had been created to prevent the
province from dramatic program cuts, but the government was criticized by media
pundits, opposition parties, and their own supporters for a return to deficit
financing. Although recourse to the Sustainability Fund continued, in 2011 the
Progressive Conservative government – under a new leader, Alison Redford –
decided to borrow on various money markets to continue spending. While the
operating budget had entered a surplus – that is, spending on programs had fallen
behind revenues – the government decided to borrow for the purpose of
constructing physical infrastructure.
!
In the leadership campaign of 2011, Redford had promised to introduce a system of
zero-based budgeting. The concept behind zero-based budgeting was to have every
department and agency start with no funding. After a review of all programs
departments would receive funding for those measures which could be proven to
have a positive outcome. Within weeks of winning the leadership, Redford and her
senior advisors transformed the plan for zero-based budgeting into Results-Based
Budgeting. Similar to performance and zero-based budgeting, Results-Based
Budgeting focuses on results. With RBB the outcomes of any program are
evaluated as to whether or not it is meeting its goals.
!
In February 2012 the Result-Based Budgeting Act was proclaimed. The Act
established a comprehensive review of all government programs which
4
Ibid., 290.
5
Ibid.
6
It should be noted that the 2008-09 Alberta Budget predicted a $8 billion surplus, but
falling oil and gas prices left the government with a $4 billion deficit.
emphasized successful service delivery and outcomes. The motivation behind RBB
was to identify unnecessary spending and programs that no longer fulfill their
assigned tasks or had become obsolete. This would, the government hoped, provide
an opportunity to redirect funding to achieve higher priority outcomes. Budget
formulation was to revolve around a set of predefined objectives and expected
results or outcomes. The outcomes were to align with the Government of Alberta’s
seven strategic goals: honour Alberta’s communities; support vulnerable
communities; create healthy Albertans; invest in learning; preserve the province’s
finances; ensure innovative, responsible resource development; and build
relationships and markets.7 The outcomes of a program were to be measured
against the seven provincial goals.
!
It was hoped that the full cost of activities, the identification of program
duplication, and clear lines of responsibility for policy success and failure could be
determined.8 There were three steps identified in this process. The first was
coherent objective setting. A distinction was to be drawn between the objective and
the activities which are necessary to achieve them as well as external factors which
could affect the success of the implementation of the budget. Second, the areas or
activities to be reviewed were to be identified. This entailed naming policies and
programs to which resources can be attributed and measured. Third, there were to
be measurable performance indicators. Realistic performance indicators needed to
be defined which would measure the effects of programs.
!
It is within this framework that the Alberta Treasury Board was given the
responsibility of organizing and conducting a Results-Rased Budgeting review of
all the province’s programs and services. The review was to ensure that program
outcomes met their intended goals and that the various services provided by the
public sector were relevant and delivered in the most effective and efficient manner
possible. As defined by the Treasury Board of Alberta, the Results-Based
Budgeting review had six goals. First, RBB was to ensure that Government of
Alberta programs and services were delivered in an efficient manner. Second,
public servants were to have the opportunity to contribute work that was relevant
to the clients they served. Third, the government was adamant that the RBB
process was about effectiveness and efficiency of programs; it was not about
reducing budgets to meet arbitrary cost savings targets. Fourth, the RBB
7 Treasury
Board and Finance, Results-based Budgeting Guidance Document & Lessons
Learned for Cycle 2 Proponents – Version 2.0 September 2013. Edmonton: Board and Finance,
2013) 22.
8
European Commission. Results Based Budgeting Manual (n.p. 2005) 4.
framework was to ensure that the departments, agencies, boards, and commissions
made evidence-based decisions. The fifth objective was to avoid automatic or
incremental growth in spending. There was, in other words, to be greater
intentionality in the budgeting process. Finally, the RBB process was to present an
opportunity for staff to assess programs and services to identify those which were
meeting their goals and those which were not.
!
Treasury Board emphasized that the Results-Based Budgeting was not a cost
cutting exercise. It was not concerned with reducing program “budgets to meet
arbitrary spending” reductions.9 The RBB process was not to focus on outsourcing,
cutting staff or reducing services. A difference frm previous performance reviews
was that RBB was to be conducted across ministries in order to bring greater
coherence to program and service delivery.10 This was a very different approach to
budgeting than the Klein era reforms. The Klein government focused on deficit and
debt reduction and did not permit cross-departmental consultation. The ResultBased Budgeting exercise was concerned with the budget process as a method in
which to rationalize programs and services. In this way it was not simply a costcutting exercise – it was an attempt to make a fundamental shift in the way
provincial budgets are constructed.
!
The Results-Based Budgeting exercise was to proceed through three cycles. One
third of government programs were to be reviewed in each cycle. The process was
to be led by Alberta Board based on a set of identified outcomes and priorities
compiled from within the lines of business demarcated by Board. RBB reviews
were not to be conducted based on the existing departmental structure. Instead, the
performance assessments were to be done on 16 major “lines of business” (LOB).
The lines of business were identified by Board staff and linked to the goals set-out
in the 2013-16 Government of Alberta Strategic Plan. The lines of business in
Cycle 1 included Municipalities and Regional Planning; Early Childhood
Development; Supports for Disabilities; Health: Primary Care and Health Benefits;
Enterprise and Ministry Support Services; Economic Development: Market
Access, Value-Added and Diversification. Cycle 2 lines of business were:
Recreation and Culture, Incomes and housing Supports and Individual Capacity to
Act; Education: Equitable, Affordable Access and Ensuring Quality; Enterprise and
Ministry Support Services; Resource Management and Environmental
9Budget
Development and Reporting Division, Alberta Treasury Board and Finance,
Results-based Budgeting: Alberta’s Approach (Edmonton: Alberta Treasury Board and Finance,
2013), 1-4.
10
Ibid., 1.
Stewardship; Economic Development: Infrastructure and Transportation Capacity
& Stable, Secure and Predictable Business Climate. The Cycle 3 Lines of business
were categorized as: Protecting Albertans, Wellness and Acute Care and
Continuing Care; Education: Supports for maximizing Preparedness for Life, Work
and Community, and Enterprise and Ministry Support Services. Each line of
business was to be headed by a lead ministry and was to include related programs
and services from multiple departments.
!
Lead ministries were to establish a working group with representatives from each
department in the LOB. Lead ministries were also to be responsible for
coordinating work and documents through the review process. Some ministries
established Results-Based Budgeting offices to coordinate with the various
program areas during a review. Other departments used existing project offices in
their ministries to manage RBB activities.
!
The lead ministries established a governance model and approval processes for the
review plans and other information produced by the line of business working
groups. The governance model was to identify the Ministerial Working Groups and
cross-ministry Deputy Minister and Assistant Deputy Minister groups. The
governance structures in the three cycles were established as soon as possible after
the working group was in place. The governance structure was an internal
document to assist the line of business working group align efforts and with Line
of Business outcomes and review plans.
!
The working groups were constructed an “inventory” of the various programs
under a particular line of business. It was important that the inventory be reviewed
to ensure all programs, services, agencies, boards and commission were
categorized under the appropriate LOB. If a working group recommended, for
example, that a program be moved from one ministry to another, justification had
to be made to Board.
!
The Results-Based Budgeting process was built on program logic models (PLM).
Their purpose was to ensure that each line of business would have common
components – if not measures – in the RRB review. Logic models for programs
within a line of business were to describe the activities undertaken, the outputs
produced, and the results or outcomes of the program. The logic model was to help
program managers: i) ensure that a program was designed in a rational manner and
that the proposed outcomes are realistic; ii) understand how the policy led to the
desired outcomes; iii) describe the roles and responsibilities of stakeholders; iv)
develop performance measurement frameworks to measure the utility of grant
programs; v) assist program managers in the interpretation of program data; vi)
provide a means by which performance measurement strategies and evaluation
strategies could be linked for better program monitoring; vii) serve as reference
points in future evaluations; and viii) help communicate information about
programs to civil servants and stakeholders.11
!
The program logic model was presented in a pictorial format.
Results-Based Budgeting Logic Model
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inputs
activities
outputs
outputs
Immediate
outcomes
outcomes
intermediateou
tcomes
Ultimate
outcomes
Source: Board and Finance. Results-based Budgeting: Building Program Logic Models (PLM).
Edmonton: Board and Finance, 2013. 5.
!
Outcomes were a key elements of the Results-Based Budgeting process. Each line
of business was to establish outcomes. Review teams were required to demonstrate
how program outcomes aligned with the line of business outcomes as well as the
government’s strategic goals. Outcomes were determined at workshops where
participants from each ministry collectively arrived at outcomes appropriate to the
line of business. While review plans for a line of business were a stated
requirement of the program, no direction was given other than to state that working
groups were to take into consideration outcomes and measures, methodology,
stakeholder engagement and deliverables.
!
The results of the program review were then to be presented to a challenge panel.
Challenge panels were committees of appointed members who were appointed by
the Government of Alberta to represent the larger community in the Results-Based
Budgeting process. Each line of business was assigned a challenge panel. The
panels were to be chaired by a member of the Board Committee. The panels were
11
Board and Finance, Results-based budgeting: Building Program Logic Models (PLM),
(Edmonton: Board and Finance, September 2013), 1-9.
to include at least one government member of the legislature (MLA) as well as five
or six external representatives. The external challenge panel representatives were
described as eminent persons from the business community, academe, and the nonprofit sector. Board and Finance staff were to provide secretarial and logistical
support as well as assist the chair in preparing panel meeting agendas.
!
Each Challenge Panel to met at least twice. The first meeting was to determine
whether the performance review plan was adequate and whether it addressed the
key questions of relevance, effectiveness, and efficiency. The line of business
review plan was to be presented at this stage. The presentation was intended as a
general overview of the performance review agenda. The first meeting with the
challenge panel was to facilitate a better understanding of the line of business and
the methodology of the program assessment.
!
An orientation session for the challenge panel members was conducted by Board
personnel. The Board staff would describe the RBB process and present an
overview of the line of business under consideration in the particular cycle. After
the presentations by the line of business proponents, the challenge panel was
required to provide a report with an assessment and recommendations of the
performance review plans. Challenge panels were then to hear the results of the
reviews, question the results and ensure the assessments were conducted according
to the agreed upon work plan. Based on the presentations and reports the challenge
panels were to provide comments to the President of Board and Minister of
Finance and the Board Committee of cabinet.
!
Policy Drift, Layering and Conversion: Where Does Results-Based Budgeting
Fit?
!
Since the 1970s, the Progressive Conservative governments have tried to manage
spending. Over the more than forty years since Peter Lougheed was first elected
various performance reviews and spending cuts have not yielded sustained results.
Instead, provincial spending has increased when resource revenues have climbed
and decreased when these same revenues have fallen. This has led to uncertain
patterns of funding and program instability. The efforts of the government to
stabilize fluctuations in revenue and spending can be categorized as either policy
drift or layering.
!
Progressive Conservative governments have not been able to stabilize the budget
process to account for volatility in revenue. This revenue management problem is
the result of an inability to isolate the variable unstable oil and natural gas revenues
from the stable or reliable revenues such as personal and corporate incomes taxes.
The Results-Based Budgeting process was not intended to manage revenue
fluctuations. It was not designed to change the pattern of spending increases and
spending cuts which occur through cyclical variations in revenue.12 Rather RBB
was directed at making good use of whatever funds are available.
!
Two efforts at revenue stabilization have been attempted in Alberta since 1971. The
first is the 1976 Alberta Heritage Savings Trust Fund; the second is the
Stustainability Fund created in 2002. While the Heritage Fund was designed to
provide a predictable revenue stream, it rate of return has been unsteady. The
Sustainability Fund, on the other hand, was designed to address short term revenue
fluctuations rather than make up for any operating shortfalls in a budget year.13
!
The Heritage Fund and the Stabilization Fund were efforts to stabilize revenue, but
they had little impact on how budgets were made. The provincial government
continued to allocate funds through a traditional departmental structure. The efforts
to ameliorate the fluctuations in provincial revenues without altering how budgets
were made were examples of policy layering and policy drift. Policy drift has been
defined as a shift in the context of policies or programs that significantly alters
their effects.14 While the context may have changed, policy and programs have not.
This situation renders them ineffective. Policy layering, on the other hand, refers to
the inability to reform institutions. When institutions and processes are resistant to
change, reform is likely to come in the form of layering, such as the addition of
superficial changes to the existing structure such as efforts to reduce revenue
volatility from oil and natural gas revenues.15
!
In the Alberta context a budget process was established in the early months of the
Lougheed government in 1971-72. While Lougheed institutionalized the cabinet
decision-making processes – a dramatic change from the pre-institutionalized form
12
Robert A. Ascah, “Savings of Non-renewable Resource Revenue. Why Is It So
Difficult? A Survey of Leaders’ Opinions,” In David L. Ryan, Boom and Bust Again. Policy
Challenges for a Commodity-Based Economy, (Edmonton: University of Alberta Press, 2013),
176.
13
I would like to thank Mel McMillan for these comments.
14
Jacob S. Hacker, Policy Drift: The Hidden Politics of U.S. Welfare State
Retrenchment,” in Woldgang Streeck and Kathleen Thele eds., Beyond Community: institutional
Change in Advanced Political Economies (Oxford: Oxford University Press, 2005) 40-82.
15
Ibid., 48-49.
of the outgoing Social Credit government – the budget process remained largely
intact. Lougheed carried over from the Social Credit era a type of budget making
that was more formal in its approach to spending but which maintained the
traditional system of departmental requests for funding. Little overall co-ordination
of government programming was apparent until the late 1970s when Lougheed
undertook a review of provincial programs and services. Nevertheless, the program
review did not alter the political-institutional context of budgeting.
In the late 1980s, a severe decline in provincial revenues initiated a thorough
performance review. Again, while overall provincial spending was cut and
programs eliminated or downsized, no serious effort was made to change how the
budget process was conducted.
!
In the mid-1990s the Klein Government began a performance review along with
program cuts and elimination, privatization of services, and deregulation. While
the goals of deficit and debt elimination were achieved, the pattern of budget
making remained intact. The “Klein Revolution” as the budgeting cutting process
was called, left budget making unchanged. The Klein Revolution worked around
and within existing institutions, layering the cost-cutting policies on the existing
political-institutional framework.
!
The Results-Based Budgeting process introduced in Alberta in 2012 was different
in its intent than previous performance review exercises. It was an attempt to avoid
the path-dependency of previous performance reviews. It was a strategy of what
has been described as conversion. The RBB process was an attempt to alter how
programs were funded without any formal policy revision. This ground-level
change was an effort to use existing policy levers in new ways that would allow for
an evidence-based assessment of government programs. The Results-Based
Budgeting model realigned departments under lines of business. The lines of
business were clusters of similar programs and responsibilities. They may or may
not be in the same department but they performed related functions. It was
expected that the lines of business rather than the traditional departments, would
become the basis on which programs are funded.16 If implemented, the this process
would be a significant departure from the existing budget model without any
formal revision to the institutions and policy of the government. It would be a
change in implementation without a formal policy revision.17 Simply put, the
implementation of Results-Based Budgting if carried through to its conclusion
16
Interview, Board Official, Edmonton, 26 March 2014.
17
Hacker, “Policy Drift: The Hidden politics of U.S. Welfare State retrenchment,” 46.
would see a conversion in the budget making process in Alberta.
!
If the Results-Based Budgeting system was implemented, the Ministry of Board
and Finance would continue as the key central agency in any budget discussion,
but spending likely would follow programs rather than ministries and decisions
about funding would be considered according to the government’s objectives. That
is to say, decisions about spending would no longer align with the traditional
departmental pattern. Results-Based Budgeting, as described by senior officials in
the Government of Alberta, would deploy existing policy levers in new ways. The
RBB process was not a revision of policies through the usual procedures of
decision-making. Unlike other performance reviews since the transformation of the
executive decision-making process under Lougheed in 1971, the Results-Based
Budgeting model is an effort to use existing structures but to do so in such a way
that reform of the budget process would occur without formal institutional
transformation.
!
!
Conclusions:
!
The introduction of Results-Based Budgeting in early 2012, was more than a
performance review. It was a cautious effort to reform with budget process without
substantial institutional reform. While there had been performance reviews in the
past – especially in the late 1970s, the late 1980s, and in the mid-1990s – these
exercises had left the budget model intact. After the performance reviews were
completed, traditional patterns of institutional bargaining resumed and many of the
problems which decision-makers had hoped to eliminate returned. Performance
reviews such as results-based budgeting may provide assistance when cutting
budgets, but they cannot be expected to solve revenue issues such as fiscal deficits.
Deficits and fluctuations in expenditures are the results of revenue
mismanagement. The most visible example of the inability of previous
performance reviews to address issues of revenue mismanagement has been the
return to budget deficits – if not debt– in the late 2000s and early 2010s. Despite
significant fiscal restraint the political-institutional context of the provincial budget
process remained the same. Although the Klein government implemented
significant cuts to program funding and taxes little was done to alter the way in
which spending decisions were made.18 As a result, the political commitment to
fiscal management could not be sustained because of increasing demands from
departments, stakeholder groups, and voters and a refusal to increase taxes or seek
18
I would like to thank Mel McMillan for his comments on this section of the paper.
new sources of revenue. Simply put, the traditional budget process based was at
least partially responsible for the failure to manage volatile revenues and growing
demands for program spending.
!
The Results-Based Budgeting process is different than its predecessors. First, along
with a review of all programs and services of the Government of Alberta, the RBB
is centred on the idea of changing the budget process from the traditional
departmental model to a system based on lines of business. This small but
significant reform could reduce program duplication and better co-ordinate and
manage existing programs. This is very different than the Klein Revolution of the
1990s which saw 20 per cent budget cuts with little planning for future spending
needs. Second, the Lougheed, Getty, and Klein performance reviews were
conceived and directed by cabinet. The RBB process had both political and
administrative support. Finally, the decision to conduct a performance review
based on lines of business has given politicians and administrators a better
overview of programs and services. The RBB Working Groups within each line of
business produced a catalogue of programs provided by the Government of
Alberta. This has allowed for a critical assessment of their relevancy, effectiveness,
and efficiency. It has also led to a new alignment of programs which has the
potential to avoid duplication of responsibility across departments. This is a very
different approach to program review. It is as much a change in process as it is an
effort to adjust spending priorities. The current RBB project may be understood as
an administrative re-ordering of the provincial state. But it remains to be seen
whether the political leadership has the inclination to the framework put forth in
the Results-Based Budgeting exercise to better manage volatile revenues and
growing demands for increased spending.