Reconciling planning and budget cycles

   By Mariela Buonomo, IIEP


For more predictable funding, technical cooperation is putting more focus on creating stronger linkages between planning and budgeting during plan implementation.

It would seem fairly obvious to state that an education sector plan cannot be implemented and therefore cannot achieve its policy objectives without the required financial resources. Oftentimes, however, policymaking, planning, and budgeting take place independently of each other. This is partly because these are processes with different horizons, which are led by different actors, and that follow distinct procedures and even schedules. While education plans are developed for the medium- or long-term, budgets tend to have a shorter-term perspective. The ministries or agencies in charge of education lead education policy, whereas the formulation of the national budget is usually steered by the ministry of finance. 

How can these two processes be reconciled to ensure that the implementation of an education sector plan is supported by adequate and predictable funding?

The development of cost scenarios and a financing framework during the plan preparation process contributes to the creation of a more credible plan. Tools such as simulation models and related macroeconomic frameworks present policymakers with different scenarios so that they can choose those that are most realistic in terms of their financial feasibility and sustainability. 

Multi-year action plans can take the cost and financing framework even further, by enabling a more explicit connection between the financial needs of the education plan and the national budget. For this link to happen though, there needs to be effective dialogue and coordination between the actors involved in implementation, planning, and those guiding the formulation of the national budget. Additionally, the constraints posed by the macroeconomic context – in terms of availability of public resources in the short- and medium-term – need to be integrated into the action plans. In times of economic crisis many countries have adopted measures of fiscal restraint, such as freezing recruitment into the civil service or setting a ceiling on overall expenditure, thus forcing education ministries to make hard trade-offs. To reduce the mismatch between worthy policy goals and economic realities, countries are increasingly adopting medium-term frameworks to guide the budget formulation process.

Many countries are turning to Medium-term expenditure frameworks (MTEF) to enhance the predictability of funding. These are a government strategic policy and expenditure frameworks, based on projections about the state of the economy and the national finances and multi-year assessments of spending requirements. As a result, an MTEF provides a multi-year perspective for budget preparation as well as for the development of education action plans. It is also a tool for dialogue and consensus building between ministries of education, finance and other stakeholders. Frequently MTEFs are accompanied by a programme-based approach to budgeting, further strengthening the link between strategic planning and budgeting.

IIEP provides technical support to various member states in the development of capacities for strong cost and finance frameworks as an integral component of education sector planning. Technical cooperation has also focused on better linkages between planning and budgeting during plan implementation. As several member states are introducing results-based budgeting as a means of improving performance of public service delivery and accountability, IIEP has been enhancing its support in this area. During a recent technical workshop organized by the UNESCO Bangkok and IIEP, countries from the Asia Pacific region explored the challenges and opportunities of results-based budgeting to achieve better educational outcomes. IIEP is also supporting the development of national capacities through a booklet on the implementation of results-based budgeting in education in the Asia Pacific region.


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