Efficient central government in digital Finland: What should be considered during an administrative reform?

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When public administration is efficient, we can achieve more with our shared funds. Digitalisation offers a variety of opportunities to renew and boost central government; the opportunity to standardise and automate administrative processes, in particular. In this series of articles, we describe – based on our audit information – which issues should be considered when starting the digitalisation of public administration. The observations are based on specific audits, but the same principles can be applied to broader administra-tive reforms.

Opportunities offered by digitalisation should be considered whenever developing public administration

The phrases “well planned is half done” and “getting things right the first time around” apply well to this era of digitalisation: reforms often have long-term effects on the effectiveness of public administration. The opportunities offered by digitalisation should be effectively utilised, as subsequent corrections may be costly. The probability of successfully realising a reform is higher if the approach to the change is as comprehensive as possible.

The current status and outlook of general government finances give rise to the need to aim for the boosting of public administration in the short, medium and long term. At the moment, digitalisation is the key means of boosting public administration, and the opportunities offered by digitalisation should always be considered when making decisions at all levels of public administration – in the case of changes that extend farther than the Government, in particular. A sufficiently comprehensive assessment of the opportunities and risks of reforms is important when developing digital public administration.

The administrative sector understands that digitalisation will change job descriptions and routine tasks. Technical development offers more opportunities to boost public administration by automating processes and routine tasks in tax collection, the administration of subsidies, debt management and HR administration, for example. During this decade, digitalisation has clearly changed central government finances: more and more functions are being managed at service centres through shared information systems. And this is not where the change ends.

Issues must be comprehensively studied during a change

When starting the process of reforming and developing public administration, the approach to the change should be as comprehensive as possible. Seeing the big picture is important when making decisions. Some central government development and reform projects have failed because the parties involved did not have a sufficient idea of the big picture or a shared view of the situation.

Legislation on the issues being reformed, budget procedures and sufficient internal control should be considered already at the planning stage to ensure once and for all that the reform will actually boost the functions and processes. The possibility to carry out a reform may be compromised if a host of exceptions and limitations in legislation and budget procedures increase the administrative workload and costs when the processes are being standardised and automated.

Even a single exception can cause relatively high costs in an extensive project. The longer-lasting the effects of the exceptions, the higher the costs they can cause. In some of its audits, the National Audit Office has noted that a limitation or obstacle in legislation or the budget materially hampered the achievement of an efficient administrative reform and increased the costs. Personal taxation is an example of a case where a large number of non-standardised regulations that are continuously changing has hampered the boosting of the efficiency of the taxation process.

Reforms should be carried out in such a manner that any material obstacles and limitations can be identified at the planning stage. The more standardised, clearer and simpler the regulations and the budget procedure are, the easier it will be to boost the administrative processes and the easier it will be for the developers of public administration and decision-makers to understand the big picture. Hence, administrative changes and flexible solutions will be easier to implement in future. Standardised, clear and simple regulations and budget procedures will also reduce the number of exceptions and limitations that can prevent the achievement of all the desired efficiency benefits of a reform.

 

Other articles in this series