Financial Transparency

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• Posted by alexstobart June 11, 2021 at 16:01

  This is very important as the economy recovers and spending choices are made by Ministers, local authorities, NHS and other parts of the public sector. Businesses also can get involved to help share awareness of finance and the value for money. Across Scotland there are co design programs to reduce the friction, effort, risk and cost of services in order to improve outcomes and respond to build back better following the pandemic outbreak / Covid.

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• Posted by HumanRightsBudgetWorkingGroup June 21, 2021 at 10:08

  A government’s budget is one of its most important policy documents, setting out both its spending priorities and its values. It sets out how much money it intends to raise, from which sources, and how it plans to allocate and spend those resources. The way public bodies generate, allocate and spend money has huge implications for realising people’s rights. Public bodies cannot guarantee people’s rights without funding the policies, institutions and systems that are needed to make them a reality. Taking a HRBA to budgeting would similarly embed fairness, transparency and people’s participation in resource allocation, financial decision making, monitoring and accountability . Human rights budgeting helps public bodies to reflect their values and ensure that their budgets respect, protect and fulfil human rights. In human rights budget work, human rights standards shape the budget’s goals, and human rights principles (including participation and transparency) shape the budget process in all of its stages. This can improve the impact of economic policy by making sure that financial decisions benefit those who are most in need. It would make Scotland more equal, reduce poverty and disadvantage, and help people live better lives. A fundamental aim of human rights based budgeting is that human rights standards shape the goals of a budget and human rights principles shape the process of budgeting in all its phases. One of these key principles is Transparency. Transparency is a window into the budget execution of the government, helping the general public to hold the government to account and yet fiscal policies are perceived to be inaccessible to most people. Fiscal transparency requires the provision of comprehensive and accurate information on past, current and future activities of the government, and the availability of such information can help to improve the quality of decision making processes. It is an important element in the effective management of public finances, and it helps to build the confidence of the general public in the work of public bodies, thereby contributing to the sustainability of public policy implementation. Fiscal transparency is commonly defined and measured according to the availability and quality of fiscal information. The Open Budget Survey examines the levels of fiscal transparency, participation and accountability in 117 countries every 2 years. The survey assesses the public availability of the eight key budget documents, that, taken together to provide a complete picture of how public resources have been raised, planned, and spent during the budget year. Using the OBS framework, the HRBW Working Group explored the issue of public participation in relation to budgetary decisions at the national level compared to 117 countries worldwide . Significantly this analysis found a lack of fiscal transparency hinders public participation resulting in Scotland’s ranking for participation remaining below what is considered to be acceptable by international best practice standards. A score of 61 or above out of 100 indicates that a country is publishing enough material to support informed public debate on the budget. In 2019 the Commission followed the OBS methodology to produce equivalent scores for Scotland - the results showed that whilst Scotland fared well with regard to oversight mechanisms, we fell well below what is considered adequate for transparency and participation opportunities, with scores of 43 and 20 respectively. A key contributor to these low scores was the fact that we didn’t produce 4 of the 8 key fiscal documents. Governments often fail to publish key budget documents - Scotland is not alone in this regard. One-third of the eight key budget documents that should be published worldwide are not available to the public. Governments including our own tend to release more information during the formulation and approval stage of their budget process than they do on implementation, which undermines government accountability for spending the budget as approved by the legislature. Even when budget documents are published, they frequently lack the types of information that citizens want to see. Many organisations are now focused on tax equity and increasing revenues, but few countries provide detailed reporting on tax expenditures – the revenue lost from tax breaks or exemptions given to business or individuals or those lost through tax avoidance, evasion and debt. Governments need to do more to identify what budget information the public actually wants to see to help them to engage. In 2020 – as was the case for the budget year we studied for the OBS - the Scottish government has not produced a citizen’s version of the budget. In years where it has – this document has been produced after the budget is passed – so for information after the fact rather than for the purpose of engaging the public in decisions before they are made. The lack of transparency and lack of opportunities to participate in fiscal decisions prevents us from realising the potential benefits of greater openness of fiscal policies. Just imagine what could happen if all the energy and time that people are putting into protests fighting inequitable policies could instead be channelled into constructive debate and collaboration between the government and its citizens. Some of the measures that can enhance transparency are: the adoption of laws ensuring the public’s access to information on governmental processes, decisions and policies as well as institutional reforms on operating procedures and decision-making processes. Transparency is an important human rights principle that supports efficiency, especially in relation to both the design and greater disclosure of information over tax incentives. Accessible mechanisms for complaints and redress should also be put in place as part of both transparency and accountability principles.

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