Tag: Justine Greening

Below is the text of the speech made by the Secretary of State for International Development, Justine Greening, which was held on 6th December 2012.

Sustained growth and poverty eradication around the world have been underpinned by what the Prime Minister has called the golden thread of development: open societies and open economies where everyone can participate and use their skills and maximise their potential. Transparency is one of the building blocks of the golden thread. Transparency helps to create the basic conditions that people need to lift themselves out of poverty.

The Prime Minister has challenged us all to get our house in order, including in the developed world. Driving greater aid transparency is a critical part of this. I made it clear in my first few weeks in this job that I will continue to focus on getting value for money from our aid programmes and will do it transparently. UK taxpayers will demand no less from us.

But it is not just citizens in Britain who need more transparency of aid budgets. Transparency means that recipient governments can plan and manage the resources coming into their country. It empowers citizens and parliamentarians in these countries to hold governments and donors to account.

In India DFID supported the Government of Bihar to develop the Right to Public Services Act 2011 and implement a public awareness campaign to improve services for the poor. Establishing this as a right and raising awareness of it, led to a big increase in application for services. The first 5 months saw more than 9 million applications and there was an associated improvement in service delivery with more than 80 per cent of applications successfully processed.

So transparency is important. I’m speaking to the converted here. Today I want to talk about two things. Firstly, I want to commend the UK aid sector for the progress that we have made together.

And secondly, I will announce new work that means my department will be pursuing even faster progress.

Progress

The UK has played a leading role on aid transparency amongst the major donors.

The Prime Minister’s commitment to transparent public servicesand open data has enabled DFID to lead and drive a similar agenda in the aid world. DFID has made great strides over the last couple of years. We were the first development organisation to publish data according to the International Aid Transparency Initiative’s standard.

We redesigned project documents to make them more accessible to the public. Transparency featured heavily in DFID’s Country Operational Plans and in the Multilateral Aid Review. We have continued to put more new and detailed information on our aid spend into the public domain. And we are continually working to improve the quality of this data.

All organisations receiving DFID Partnership Programme Arrangement funding will now publish data in line with the International Aid Transparency Initiative standard this year. UK Civil Society Organisations, such as CAFOD, Oxfam GB and Save the Children UK, are leading the world in this area. DFID is promoting greater transparency and accountability in the countries with which we work – encouraging work towards more open government and fiscal transparency.

These efforts have borne fruit – we saw DFID jump from 5th place to 1st place in the space of a year in the Publish What You Fund Aid Transparency Index. It was great recognition of our achievements and the effort put in by DFID staff all over the world.

Even so, this also needs to be an international effort. Transparency was one of the four key principles that countries agreed in Busan.

The International Aid Transparency Initiative agreed a common standard for aid transparency in February last year. This is now a shared objective of 35 major aid providers. It is endorsed by 22 partner countries. And in November UN Women became the 100th organisation to publish their data.

DFID has a bold and ambitious vision on transparency.

We believe it should be possible for anyone, anywhere to track our aid spending right through the aid system – from the taxpayer to the beneficiaries. Increasing the traceability of aid will help beneficiaries feed-back on its impact, increase transparency of governments, and reduce waste, fraud and corruption.

At the Open Up! conference, DFID shared the Department’s new Open Aid Information Platform. I think this is really exciting. The Platform will give line of sight on our programmes from start to finish. But the Aid Information Platform will only work if organisations and intermediaries down the aid chain provide information about what they are doing with DFID’s funding. What more do we need to do?

So we are launching what I’ve called an Aid Transparency Challenge to ourselves and our partners to deliver this vision.

Firstly, we will require organisations receiving and managing funds from DFID to release open data on how this money is spent in a common, standard, reusable format.

They will need to require this of sub-contractors and sub-agencies – right through the aid chain. This will include the unique identifiers that will make it possible to follow the money.

We will support our partners in this process and we’re going to make sure it is not an unreasonable barrier to accessing DFID’s aid. But we are very serious about making aid more traceable.

Secondly, we recognise that making aid information open is the just the start. For transparency to be transformational we need to encourage the use of this aid data. So to do this we will establish an Aid Transparency Challenge Fund to stimulate work by developers to create tools promoting the use of open aid information, supporting the traceability of aid, and improving results reporting.

Such tools may also help us answer critical questions on traceability of different delivery chain models; making data relevant to different users whether they are aid data experts in Kenya or activists in Britain; and relating aid data with other datasets, such as development indicators.

We believe this is a public good so we will require that all tools developed through this Fund are made ‘open source’ so that others can use and further develop them. To go alongside this we will also bring developers together to build awareness of the business opportunities open aid data creates.

New International Development Sector Transparency Board

DFID will also seek challenges from the people who produce and use this data through establishing a new International Development Sector Transparency Board by March next year. This Board will have representatives from DFID, civil society, aid contractors, open data experts, partner countries, privacy experts and other government department representatives.

Finally, we will improve our data through geocoding aid, showing on maps where DFID aid is spent at the local level. And we can make it compatible with partner country budget classifications, enabling government and citizens to see where aid is supporting their own priorities increasing accountability. We will improve our data by publishing feedback of those directly affected by aid.

To conclude, we are at a critical juncture in development with discussions of a new framework for international development. Now is the opportunity to build on our progress in driving a more transparent aid system and look forward to the opportunities we now have to work together to embed the principles and practice of transparency in the heart of development cooperation.

Below is the text of a speech made by the Economic Secretary to the Treasury, Justine Greening MP, at the Economic Research Council, held on 15th March 2011.

Introduction

Thank you.

It’s a pleasure to be here this evening and it’s always nice to see a few familiar faces.

Although I think it’s fair to say that today’s event is a little more complicated than I originally thought it would be.

The week before a Budget is not usually the best time for a Treasury Minister to be out delivering lectures on what the Government is doing.

If last year is anything to go by, we’re usually holed up in Westminster; pouring over submissions; and weighing up rather difficult decisions.

In fact, that’s largely how the last month has been.

So this is something of a welcome reprieve.

Yet that doesn’t distract from the fact that now really isn’t the time for discussing domestic policy.

Which is why I’ve had to think quite hard about what I what I want to talk about today.

Initially, I thought I should review some of the Government’s ongoing initiatives.

For example, our strategy for updating Whitehall’s accountancy frameworks.

But just by mentioning this as a possibility, I can see that some of you are already starting to nod off.

Which is why, in the end, I thought better of it.

Instead, I’ve decided to deliver my own Budget speech, 8 days before the Chancellor.

Unfortunately, I’m afraid I won’t be giving anything away.

For today I want to talk about my own experiences in negotiating the EU Budget.

The difficulties I’ve faced when trying to reach an agreed position.

And how I’ve found working with Minister’s from across the European Union.

Because there’s sometimes a perception that venturing across the Channel is quite a fun and carefree pastime.

I often read about Ministers ‘going off to Brussels’, and I think ‘if only you knew’.

I’m afraid it’s nothing like a relaxed jaunt around mainland Europe… taking in a few sites… and seeing a few old friends.

It’s more of a test of endurance.

Where you rarely venture outside your conference chamber.

And sleep becomes something of a luxury.

I’m sure this hasn’t always been the case.

But things have certainly moved on since the early days of the economic union.

History

Which is where I’d like to start, by giving a very brief history lesson.

The Second World War clearly demonstrated the costs of a divided Europe.

No one wanted to see a repeat performance.

And in the wake of all this turmoil, what people needed was to know that this could never happen again.

Closer economic and social ties seemed a very good starting point.

And so it proved.

In 1950 the first seeds of a united Europe were sown… as the formation of the European Coal and Steel Community drew the continent closer together.

By 1957, the Treaty of Rome had been signed.

This created the European Economic Community (EEC), allowing Belgium, France, Germany, Italy, Luxembourg and the Netherlands access to a ‘Common Market’…

…One without the tariffs, subsidies and other protectionist measures that may seem politically attractive, but make no economic sense.

And in the 60 years that followed, things have really gathered momentum.

The EU has grown at an astonishing pace.

It’s now a far more complex organisation, with greater policy powers, and a lot more countries to boot.

From the original 6, we now have close to 30 Member States.

Where the focus is firmly on free trade and the free movement of labour and capital – something I’m sure you all understand the value of.

But with greater economic cohesion comes the need for more standardised European policy.

This is inevitable, but how you go about it is the subject of huge debate.

Which is why we have the EU Budget, that has also evolved over time.

In the 1980s for instance, the whole budgetary process pretty much ground to a halt.

Why?

Well, the main reason was that the annual negotiations lacked structure.

No basic parameters were set… which meant, in theory at least, there were an infinite number of possible budget solutions and permutations.

And, increasingly, Member States were so far apart in terms of an agreed position that reaching a resolution became impossible.

It was clear, therefore, that the process for settling annual expenditure had to change.

Which is why the EU adopted a completely new EU Budget Framework, covering consecutive seven-year periods.

I’m afraid this is where it gets a little more complicated, so bear with me.

I won’t bore you with the detail, but essentially, every seven years, Member States have to agree on the maximum amount of money that can possibly be spent on each pre-defined policy area.

And by policy area I mean quite broad categories like security, citizenship, or agriculture.

Broad enough at least to leave significant room for manoeuvre when it comes to the more itemised annual Budget discussions.

This sounds simple enough, as these are only high level European discussions after all.

They don’t involve you actually committing any money to anything.

You’re just setting the boundaries for later years.

But the thing is, every member of the Council has to sign-off every separate policy area within the seven-year framework.

With over 80 of them to sort out, all needing unanimous agreement, this can take anything up to a year-and-a-half…

And some things do tend to dominate these discussions – if only due to their size and the difficult way they’re managed.

The CAP and Structural Funds alone represent almost three quarters of the entire Budget.

And then you have broad themes like improving EU competitiveness – which swallows up another 10%…

…external spending on things like foreign aid – which is about half that amount again…

…as well as more general administration costs – that have a worrying habit of increasing with each consecutive year.

Yet that’s not the end of the story.

Far from it in fact.

Once you’ve agreed the seven year limits, you then have to concentrate on how this translates to the annual Budgets.

The framework may have set the highest amount that can be spent in any given year – in any specific area- but these are just the basic principles.

Now you have to negotiate within these limits on every item of expenditure.

To make matters even more complicated, this is agreed on a Qualified Majority basis – which makes pinning down the details rather challenging.

And last year was no exception.

Current economic position and Budget success

Now the point I’d like to make here is that when, back in 2005, the last seven year Financial Perspective was agreed, Europe was in a rather different economic position.

We had growth, investment, employment, prosperity.

People were living under the impression that this would never change.

And the seven year framework had a similar air of optimism that doesn’t really reflect the situation we now find ourselves in.

The global financial crisis of 2008 hit the EU incredibly hard, and Member States are still feeling its impact today.

Banks had to be bailed out, countries had to be bailed out too, and even the IMF got involved.

Yes, Europe had its own rules that were meant to provide a buffer in such circumstances.

But these were not always adhered to.

The Stability and Growth Pact, for example, was meant to keep Member States’ finances in check.

Like the EU Budget, it was meant to show prudence, caution, restraint… and ensure that Member States had something to fall back on should something unfortunate arise.

And like the EU Budget, it hasn’t always worked as it should have done.

The Stability and Growth pact has sanctions in place for any Member States who fail to play by the rules.

In theory, they should have to keep deficits below 3% of GDP, and debt levels below 60%.

The idea was always that if you failed to keep your end of the bargain – if you let things slip – then you could face fines as well as other sanctions.

But in over a decade of monetary union, quite a few Member States ran unsustainable fiscal policies… and nobody ever forced them to tighten their belts.

Sanctions were never used.

Not even once.

Which meant that when it came to dealing with the financial crisis, we were all a little out of shape.

And this is a valuable lesson that needs to be learnt…

…That responsible finances are vital to preserving the strength of the EU.

This is the message we took to last year’s EU Budget talks.

Where we wanted to break the usual pattern of these negotiations.

With Parliament always asking for more.

Council advocating for slightly less.

And the result being somewhere in the middle.

In this respect, we were quite successful.

I remember clearly when the Commission first proposed an EU Budget increase of 5.8%.

This seemed rather out of kilter with the austerity measures we –and other Member States – were taking forward back home.

But not to be outdone, the European Parliament called then for a 6% rise.

Needless to say, both positions were miles away from where we’d placed ourselves… and, fortunately, many other countries agreed.

What we wanted to see was more of a focus on where the EU can add value.

Asking questions like, when it comes to intervention, what are we trying to achieve?

And is spending money really the best way to go about it?

But, at all times, it’s worth remembering the many other policy tools that the EU has at its fingertips.

Things like regulation – which I understand comes with its own costs – but if applied correctly can be of great benefit.

There are also initiatives, such as the European Investment Bank, which could be used more widely to achieve some of Council’s ambitions.

In a sense, this all about good financial management.

As someone with a background in audit, I know all too well the importance of sound book-keeping.

That every pound – or Euro – spent needs to be scrutinised.

That if something represents poor value for money, then we need to look again at our approach.

And when times are hard, when spending comes at a premium, then we simply can’t afford to carry on with business as ususal.

Which is why, last year, we pushed so hard for a Budget freeze for 2011.

We certainly weren’t alone in our thinking.

But the majority of members opted for an overall increaseof 2.9%.

This led to the Prime Minister and 12 other EU leaders making a public statement that they wouldn’t accept any increase beyond that level.

Which is not the usual way things are done in Europe… but it worked… so maybe there’s a lesson to be learnt there too?

This broke the usual dynamic ahead of brokering a final deal.

And made sure that 2.9% was where we settled.

Yet no sooner had one year’s negotiations finished, then next year’s positioning began.

Now it’s no secret that we intend to remain tough when it comes to EU spending.

Only last December we agreed a joint letter on the EU Budget size with Germany, France, Finland and the Netherlands…

Calling on Europe to step up its efforts…

…to limit growth in the next two Budgets…

…and from that point onwards ensure that any increases are, at most, in line with inflation.

In this respect, we’ve managed to take a firm stance, and to do so jointly with other similarly minded countries.

As there’s always strength in numbers.

And the EU – with its intricate network of alliances – is no exception to this rule.

Importance of relationships

Like in any organisation, you’ve got to build relationships.

And these are far more complex than any soap opera I’ve ever seen.

Where at times it can seem like everyone has competing objectives.

Vested interests.

Or a point to prove.

Knowing who your friends are becomes vitally important.

It’s these relationships that make or break deals.

Build trust, or generate suspicion.

And either give you the confidence to push for your priorities. Or make you sit back and watch as events unfold.

There are undoubtedly bigger players in the game, but there is not a set dynamic in EU negotiations.

And it’s important that we don’t oversimplify the situation.

Let’s be clear, there’s a lot more to Europe then the UK, Germany and France.

Everyone, from Lithuania to Cyprus, plays their part.

Although it’s certainly the case that new Member States face an obvious dilemma.

Where they have huge potential.

Vast quantities of untapped resources.

And who rightly deserve to be a part of the economic union.

But when it comes to building allegiances, they face a difficult decision.

Would they be better off teaming up with their neighbours?

Taking a safety in numbers approach?

Or, alternatively, just going it alone?

Because a popular misconception is that the newer members – the Accession 8, and those who followed in their footsteps – are some sort of collective.

This couldn’t be further from the truth.

These countries have a strong sense of identity.

Varied cultures.

And distinct sensitivities.

They certainly don’t want to be lumped together.

And when it comes to the EU Budget, they’re just as likely to have differences of opinion as we are.

The whole dynamic is very complicated.

Where I’m sure many of you are familiar with the complicated nature of office politics, well Europe is not too dissimilar.

It’s also the case that the relationship the EU has with the rest of the world has an important bearing on Budget discussions.

Where there’s a real need for Europe to be seen as a success.

A source of investment, employment and growth in its own right.

Which is why, the general feeling across the Union is that Europe needs to show a degree of strength after a period of weakness.

And, in the case of the European Budget, this couldn’t be more apparent.

Where the perception is that the bigger the Budget, the better the EU is doing.

Which politically is understandable.

But economically is a little dangerous.

There’s a difficult balance to strike.

Conclusion

In fact, if there’s one message I want to leave you with it’s that the whole EU Budget process is incredibly complicated.

It’s something of a rubix cube of a conundrum.

Where you’ve got to try and align the national, European, political and economic interests to deliver the right result.

And once you’ve successfully negotiated each of these obstacles…

…Once you have a completely signed-off Budget…

…You then have to repeat the game all over again.

And look ahead to next year’s discussions.

So I hope that my little speech has made the process a bit clearer – or at least as clear as it can be.

That on the one hand, you can see why we’re calling on our neighbours to show restraint.

To rein in European spending.

And work together to consolidate Europe’s financial position.

And on the other, why this can be difficult given the nature of the European game.

That everyone wants to see the EU succeed.

But that we sometimes differ in opinion when it comes to how to achieve this.

At times this can be quite testing.

But, as a Government, we’ve made good progress in Europe since coming to office.

And I’m sure this will continue.

So now that I’ve spoken for almost half an hour, I’d be interested to hear your thoughts on the matter.

What you feel should be Europe’s priorities going forward.

And what you believe is the right way to approach these complicated issues.

Thank you.

Below is the text of the speech made by the Economic Secretary to the Treasury, Justine Greening MP, at the CIPFA/ HM Treasury World Class Performance Symposium 2011, on 17th March 2011.

Introduction

Thank you.

First of all I’d like to thank you for inviting me to speak, and I’d like to welcome everyone, particularly the international delegates, who have come here to be with us today.

Treasury fully supports this event, and as Whitehall’s central finance department, we have a real stake in what you discuss here.

Because today is all about how we can improve the way Government manages its budget.

How we can deliver the best possible value for money.

And how you, as finance professionals, will help make this happen.

Because any accountant looking at the balance sheet we inherited could see that things need to change.

The books just didn’t balance.

Expenditure dwarfed income.

And borrowing levels risked spiralling out of control.

Which is why, as a Government, we’ve set out a clear strategy to deal with this mess.

To put the economy back on track.

And deliver more efficient public services.

But setting out a business plan that’s got the backing of the OECD and the IMF is one thing.

Delivering on it is quite another.

To be successful, we need to have three things in place:

Across Government, we need the right people in charge – making the decisions and driving efficiency.

We need the right systems in place – to produce clear, consistent data that’s easily digestible.

And we need the right processes to make this happen – to control what we do and challenge conventional practice.

Without these, it becomes difficult to make judgments on how we should be spending taxpayer’s money.

So let me talk a little about each of these things in turn.

Starting with the most important – people.

People – Managing taxpayers money wisely

It goes without saying that if you want something done properly… then you need to have the right people, with the right tools, who can get the job done.

Which is why the first thing I want to see is more effective leadership.

Where performance is driven from the top…

…and having more finance professionals in senior posts will help us achieve this.

Secondly, we need to create a more cost… conscious… culture.

As when times are hard, when resources are being squeezed, every decision should be based on detailed financial analysis.

The factual, not the anecdotal.

Thirdly, we need greater finance professionalism across Government as a whole.

Where all public servants have – at the very minimum – some degree of financial awareness or business savvy.

So that they understand the basic concepts of accounting and financial management and can apply them when making judgements on spending.

And finally, we need expert central functions.

What I mean by this, is that we have to be more joined up in our thinking.

Not just across departments, but also within them.

This is about having a financial management culture and processes that are as robust as you’d find in the private sector.

And a good first step is to adopt more of the disciplines of a business group finance function.

Departmental business plans and Spending Review have helped focus minds. So, like any successful organisation, we want our finance teams to ask themselves a few simple questions:

How has your department performed generally in recent years – and how has it performed financially?

What’s been spent to achieve this level of performance?

And, going forward, what are your priorities, and the risks you face in delivering them?

Again, this something I believe we can do better.

Systems – Clear line of sight / Oscar

But it’s no use having the right people in place if the systems they have to deal with – that they need to rely on – aren’t up to the task.

Having been a private sector accountant myself, I can see that we have a big job ahead of us when it comes to getting our financial architecture right.

Currently, complexity across Government can too often disguise the real story; make even the most basic financial reports difficult to decipher; and undermine proper debate and scrutiny.

An example I often use – many of you will be aware of this – is our current reporting standards.

Where in the House of Commons, we discuss and vote on estimates – which is one set of numbers.

With different departments, we negotiate budgets – a completely separate set of figures.

And as a Government, we publish the national accounts – which are constructed using different metrics again.

Needless to say, this is a rather inefficient way of doing things.

It’s unnecessarily opaque.

And it serves no one’s interests – especially not taxpayers’.

Instead, we want to present our finances in a way that’s credible, makes them more transparent, and helps get the best possible value for money from every pound spent.

So we’re introducing a whole new approach to financial accounting across Government.

Through the Clear Line of Sight programme, we’re bringing together the various accounting frameworks that are used across Whitehall, and, as far as possible, replacing them with a single set of uniform standards.

That tackles the estimates, budgets and national accounts problem I just mentioned.

This is commonsense policy making – it will make all our lives easier; and go a long way towards making the public sector accounts more accessible.

We’re also looking to replace the Treasury’s COINS system, which I realise has been the source of many headaches.

In its place, we intend to roll out the new OSCAR database that will provide reliable financial and non-financial information.

This will make it easier for permanent secretaries to manage the money in their budgets.

It will enable us to drive value across Government.

And it will also create a system that is simpler; more coherent; and ultimately, one that generates greater accountability.

Because, if we’re to deliver on our other policy reforms, we have to improve the way we manage taxpayers’ money.

And everyone will have to get on board.

Proceses – Individual departments

This is why one of the first things we did after the Spending Review was to ask every department to come up with its own business plan.

Where each plan sets out how the department will deliver more, for less.

How public services can be run more efficiently.

And in the interests of transparency, what’s being spent to deliver these objectives.

Whether it’s staff, capital, or facilities – all this information needs to be in the public domain.

We are also working towards greater disclosure of Government transactions.

It’s for this reason that Government bodies will now publish all expenditure over twenty-five thousand pounds, any IT contracts over ten thousand pounds, and all tenders over the same amount.

And why, from this summer, we’ll be asking departments to publish a quarterly scorecard, charting their performance.

Challenges for implementation

Yes, this will place certain demands on public servants.

It will be challenging.

Not only due to increased reporting requirements, but also in terms of being more openly accountable for the services you deliver.

Yet we shouldn’t fear this.

More openness and accountability will lead to vastly improved management of resources.

And, by focusing only on the most useful data for judging performance and value for money, we will also bear down on data burdens.

This will make the public sector a better place to work.

And it will thrust the accounting profession into the limelight – demonstrating why finance professionals in the public sector have such an important role.

Conclusion

I know it’s nothing new for a Government to say that it needs to alter the way it operates.

That we need to learn a few lessons from our private sector partners.

And that the status quo isn’t going to deliver the level of financial management we need.

And it’s a real priority of ours to deliver the Finance Transformation Project that we have now set in train.

We’re committed to improving the way we manage our money.

We know if we’re to deliver on our plans, we have to get a firm grip on our finances.

Better numbers will mean better decisions.

And only by working together can we ensure that the nation’s finances are run more efficiently, more transparently, and more prudently in the future.

Thank you.