The Minister of Finance states that it is currently too early to tell which ministries will have to tighten their belts and what assignations they may get as extra.
“Let me explain the logics, it is very simple. The government has outlined 30 priority tasks which have had funds allocated to them. The financing for these priorities is from both the state budget and from EU funds, as well as the assignation saved up by the ministries in their competences.
To say that we are proposing to save 600 million euro is misleading the public. When forming the fund allocations, the ministries will not only have to save funds, but will also receive extra funding. In order to prevent the public from being misled, it is necessary to wait for the budget formation process to conclude and then all these concerns will be dispelled,” the minister told journalists on Tuesday.
He did not go into detail on which ministries will have to tighten their belts the most and in what areas, only citing that all the ministries and their subordinate institutions have numerous venues for savings, one of the greatest being spending on government owned real estate. The minister assured that his Ministry of Finance will also have to tighten its belt, something for which it is currently making plans. The Ministry of National Defence is seen as also having ample ways to save funding, particularly demonstrated by the reforms ongoing in its public procurement system.
Nevertheless, when asked if there are any calculations on how much each ministry could save on average, the minister pointed out it is difficult to compare the ministries given their varying sizes and other metrics. The Ministry of Energy may only have 60 people, but the Ministry of Foreign Affairs has a staff count exceeding 1000.
Numbers that will allow limited comparisons are to be soon released, such as how much office space is allocated per employee in different institutions.
As was written on the 15min.lt portal on Tuesday, the Ministry of Finance directed all the ministries in combination to form a 616 million euro “fund for changes”. Each ministry has been indicated a size for its expected contribution, with an extra 240 million euro to be EU funding, bringing the grand total to 856 million euro.
Deliberations and discussion
Following said publication, the Ministry of Finance released the following statement to Delfi:
The “fund for changes” will be 615.7 million euro. It will be used to distribute funding for priority tasks set by the government in 2018 and to settle earlier commitments. Of this, the ministries will have to actually save 187.3 million euro (not the entire 615.7 million euro).
The remaining portion of the “fund for changes” will be formed through the funds freed up by programmes and projects concluding in 2017, as well as the expected revenue growth expected in 2018.
The ministries will have to “find” 187.3 million euro by reviewing their activities and relinquishing non-priority, low impact measures or by reducing their financing. Ministries are also encouraged to seek venues for savings by reviewing their effectiveness metrics, staff numbers, expenses for goods and services.
Each ministry will deliberate and discuss raising efficiency and savings internally first and later so will the Prime Minister, Minister of Finance and other ministers.
The “fund for changes” (the entire 615.7 million euro) will be distributed to the ministries to accomplish the 2018 priority tasks and to fulfil earlier obligations.
Discussions are still ongoing on specific sums for specific tasks and projects performed by the ministries and there is currently yet to be a final agreement.
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