economies of scale from specialisation and larger units; to make more efficient use of ICTs; and to
improve the efficiency of purchasing.
According to Ministry of Finance estimates, some 35,000 people out of the total state sector workforce of
around 124,000 will be retiring or moving to another employer by 2011. This provides a good
opportunity to reallocate resources, to develop job tasks and skills, and to carry out even major structural
and strategic reforms in line with the principles of good human resources policy.
At the first stage of the productivity action programme in 2003-2004, productivity programmes were
drawn up by each ministry for their respective administrative areas, detailing the specific measures for
improving productivity and their impacts on personnel numbers, spending limits and the budget. All
administrative domains and departments are expected to improve the efficiency of general
administration, purchasing, ICT use and support services. The ministries’ productivity programmes
involved a total of more than 150 productivity projects. Implementation is currently underway.
At the second stage of the productivity action programme, revised productivity plans for 2005-2007 were
drawn up by each ministry. The operational and structural changes entailed by these plans will generate
an increase in productivity corresponding to the labour input of 17,500 persons by 2011. The aim is to
streamline operations and structures in such a way that only every other job vacancy created through
natural turnover is filled. This means an average annual reduction of over 2 per cent in personnel and a
corresponding growth in productivity.
Steps to increase the efficiency of finance and human resources administration in ministries, departments
and agencies will include the general streamlining of operations and the coordination of services through
newly created service centres. The first service centres in central government finance and human
resources administration have been set up or will be set up in 2006 within the administrative branches
under the Ministry of Justice, the Ministry of the Interior and the Ministry of Finance. The target for
2009 has been set at a 40 per cent increase in productivity. Resources thus saved will be reallocated to
core tasks. The Government has decided that all administrative branches shall establish their own service
centres by 2007, or they shall purchase the services they require from existing service centres.
Productivity in state administration and services shall also be increased by streamlining supervision and
decision-making in IT operations and by coordinating IT services. The specific measures aimed at
improving productivity and accounts on exactly how the proposed measures will reduce personnel needs,
are detailed in the productivity programmes drawn up for each administrative branch. The Government
will include the main productivity measures for each administrative branch in the decision on central
government spending limits for 2007-2010.
Steps will also be taken to improve service provision and the productivity of public administration by
developing electronic and interactive services on the Internet and by launching a joint online service,
which will be phased in from 2006. In addition, these efforts will be boosted by setting up a joint public
administration platform for electronic identification and payment and by developing recommendations
made by public administration.
2.4. Curbing public expenditure in the municipal sector
The cautious expenditure policy also applies to the municipal sector. Local government finances will
remain constrained over the coming years. In the longer term population ageing will cause escalating
demand and funding pressures related to basic services. According to the Government Programme the
balance in financing municipal functions and obligations will be improved through a basic services
programme covering the Government’s entire term in office and agreed upon jointly by central and local
government, and through a related annual basic services budget drawn up jointly by central and local
government and endorsed by the Government. The basic services programme will assess income and
expenditure on municipal functions and other obligations in municipality groupings and the measures
needed to balance them. The basic services programme shall be attached to the decision on central