HALIFAX – The Nova Scotia Government has run out of options and has no choice but to make serious structural changes to the way that programs are provided in the province. Such changes elsewhere have produced major improvements in the quality of services while reducing costs to the taxpayer.
This was the message contained in the brief submitted by The Atlantic Institute for Market Studies (AIMS) to the Fiscal Management Task Force. The Task Force was appointed by the Government of Nova Scotia to examine the full range of programs delivered by the province and recommend changes that will help the government to balance its books. AIMS’ brief, entitled “Getting back to basics – A strategy for effective program review”, (requires Adobe Acrobat – see link at bottom of page) is the Institute’s contribution to the Task Force in their important work.
The authors, Brian Lee Crowley, AIMS president, and AIMS Policy Analysts Keith Messenger and Nancy Faraday-Smith, stress that the reality of our fiscal situation can no longer be hidden or glossed over. Without major restructuring, they argue, the government risks losing its ability to deliver even essential programs as decision-making power slowly leaks away to the province’s creditors. Yet program reviews of this kind often lose their way by concentrating too much on the details of individual programs, rather than developing principled tests that allow them to distinguish vital public programs from ones that can be delivered in other ways. Getting back to basics offers both an overview of why program review is necessary, plus a set of basic analytical tools for a common sense evaluation of all government programs. The brief can be downloaded from the Institute’s website at www.aims.ca under “What’s New”.
Typically, there are three direct levers – spending reductions, reducing debt service costs, and raising taxes – available to government to align public spending with revenue. But the AIMS brief points out that rigid debt servicing costs and the competitive imperative to lower taxes leaves spending reductions as the only direct action that the government can take today to safeguard the sustainability of core public services. Moreover, successful program review now is necessary to avoid drastic, unpopular, and uncompetitive tax increases or much deeper spending cuts in the future.
If the Nova Scotia Fiscal Management Task Force is to make a constructive contribution to effective change by the government of Nova Scotia, Crowley, Messenger, and Faraday-Smith recommend it consider that:
· By international standards, Nova Scotia is delivering many programs through taxation and public provision that could easily be delivered by other means;
· Many of the government’s core services are poorly organized and are therefore often ineffective and far more costly than they need to be;
· Program review will only succeed if the Task Force applies a series of consistent tests to existing programs to see whether they should be delivered publicly and, if so, whether they are now being delivered effectively and efficiently;
· The tests, which represent the principles of high performance government, are: neutrality, transparency, competition and separation;
Neutrality is the principle that government should be neutral between public and private provision of services, focussing instead on which way of providing a given service produces the best value for money and highest levels of consumer satisfaction.
Transparency is the principle that full cost-accounting techniques be applied to all public services to place public and private providers on a level playing field, allowing government to maximize value by comparing the real costs of alternatives and choosing the most cost-effective option.
Competition is the principle that incentives matter, and when governments and taxpayers have a choice of service providers, that creates incentives for innovation and efficiency. Monopolies, whether public or private, lack these incentives, and therefore should be dismantled wherever possible.
Separation is the principle that elected officials should set policy, while professional managers should deliver services, guided by appropriate incentives and held accountable by well-designed hard performance measures.
AIMS is a privately funded public policy think tank based in Halifax, Nova Scotia. It seeks to stimulate Canadians to think in new and creative ways about the public policy challenges they face.
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(Requires Adobe Acrobat)