The focus of the Government's reform of commercial government agencies has been to give greater managerial autonomy to the managers but also to demand greater accountability. Accountability is in terms of outcomes or results. Because of the commercial nature of these agencies it has been relatively simple to define the results or outcomes which the public can legitimately expect.

We now need to bring this same philosophy to bear much more systematically on inner-budget agencies. There is no doubt that an enormous amount of excellent work has already been done. There is also no doubt that defining outcomes or results in the inner-budget is likely to be more difficult and more contentious.

The current budget programs have not been systematically reviewed in a rigorous fashion since their conception. Many of them do not focus, as they should, on outcomes or results - what the public can legitimately expect to get in return for the commitment of resources. Some programs are simply activities by government with no clear definition of who the client is or what the outcome should be.

Accordingly, I want to initiate immediately a fundamental program review. It is fundamental in the sense that it challenges departments and agencies to reconsider very basic questions about the nature and scope of their core activities. It should focus on the results or outcomes that the Government is looking to deliver to the public. Programs should be defined and quantified in those terms. What we do not want is a peremptory survey of current programs that simply plays, at the margins and takes the current program structures as a given.

I have asked the management Council to initiate and oversee the fundamental reviewof programs. I have asked the Office of Strategic Planning inThe Cabinet Office to talk to agencies and explain in greater detail what is required. They have developed a series of planning tools to assist agencies with the Review and are currently travelling the process with a couple of agencies'. But I want to emphasis that the Central Agencies are not going to do these reviews. It requires the commitment of the agencies and departments themselves. The process needs to be driven by the relevant Chief Executive, or group of Chief Executives in some cases.

AS I indicated above, one of the keys to reform is greater accountability measured in terms of outcomes or results. There needs to be strategic information that is readily accessible to all those who play a role in planning and decision making -myself and the Cabinet, the Central Agencies, the responsible minister and the Chief Executive officer. The office of Strategic Planning, in co-operation with the relevant agencies, has begun to develop a Strategic Information Base. I have asked them to continue this process.

The idea is not to create an enormous paper flow of information - but simply to look for a few key strategic indicators. It is also important that agencies and departments themselves come to own, this information and review and refine it, so that it eventually becomes common currency for all those involved in the decision-making process.

This review will take some time and will not be a simple process. But I do want a definite timetable developed and agreed between the Management Council and the relevant CE01s. In terms of reform of Government this is probably the most ambitious and most important we have undertaken. It will require your absolute commitment.

Yours sincerely

Nick Greiner MP

Branch : Director-General's Unit, The Cabinet Office
Date: 15 March 1991