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Project planning and its impact on the budgetary process

May 29, 20:12 UTC+3
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At the 2016 St. Petersburg International Economic Forum, President Vladimir Putin announced the transition to project principles in managing national development. The aim is to streamline budget spending by setting clear targets and introducing personal performance responsibility and accountability. In 2016, 20% of the federal budget was spent according to this principle: mostly on social and transportation projects. Now, the Government is drafting several project methodologies to choose from.

In June 2016, the President of Russia signed an executive order On the Presidential Council for Strategic Development and Priority Projects. A month later, the Council first met to define the pillars of government agencies’ performance:

  • Smooth transition to project management to strike the right balance between project-driven practices and routine processes of ministries and agencies.
  • Clear personal responsibility and accountability for decisions to avoid dilution with various bodies and agencies.
  • Removal of cross-agency barriers and red tape to facilitate decision-making.
  • Transition from process-based budget allocation to project-driven practices based on performance.

Also, approaches to set up priority projects were formed.

  • Scope out burning issues that require the use of project principles, with people’s expectations and needs factored in.
  • Inform communities on the deliverables, project status and its impact on the national economy and quality of life.
  • Set clear short-term prospects (to 2018) and link those to long-term goals.
  • Earmark a budget for priority projects covering 2017–2019 to avoid inefficient spending.

In 2016, 20% of the federal budget (RUB 3.4 trillion) was allocated to programmes based on project management principles – RUB 324 billion in health care, RUB 412 billion in education, RUB 1,202 trillion in social support, RUB 71 billion in housing and utility services, RUB 156 billion in industrial development, RUB 886 billion in transport development, RUB 237 billion in agriculture, RUB 76.6 billion in international trade.

In spring 2017, Prime Minister Dmitry Medvedev instructed relevant agencies to start applying project principles to manage the budgets of five government programmes: education development, healthcare, transportation, agriculture, accessible housing and utility services.

  • These pilot areas are to teach how to manage budgets flexibly and efficiently, with end-to-end monitoring and prompt corrective action where relevant.
  • In case of success, this project methodology will cover all government programmes.

 

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