If the effectiveness of government policy is not evaluated, there is a risk that the government will continue to implement ineffective policy. Public money would then be wasted. In this audit we investigated whether the ministers evaluated the effectiveness of policies with a social objective. We audited policy expenditure in 2010, when the government spent €111 billion on policy with social objectives.
Between 2006 and 2010 the ministers carried out nearly 1,200 policy evaluations. About 350 of these evaluations considered the social effectiveness of the policies. The evaluations related to €51 billion (46% of government expenditure in 2010) spent to achieve social objectives. Part of a further €8 billion (8%) of such expenditure was evaluated, but it is not known how much. The effectiveness of €0.4 billion of expenditure (0.3%) was not evaluated but the ministers concerned explained to the House of Representatives why not. The effectiveness of the rest of the policy expenditure (about €51 billion (46%)) has to date not been evaluated and no explanation has been given to the House of Representatives.
A minister may sometimes have good reason not to evaluate the effectiveness of a policy. It might not be possible to evaluate policy effectiveness or the cost of evaluation may be beyond the available budget. We did not establish what part of the policy was not evaluated because of such reasons. This could not be determined from the information kept by the ministries.
In their budgets and annual reports for 2006-2010, the ministries incorrectly classified more than half of their 357 evaluations as effectiveness audits when their effectiveness had not been audited. The evaluations included the policy scans introduced in 2006 to give the House of Representatives more insight into policy impact. That part of policy expenditure that, according to our audit, had been evaluated as to its effectiveness is probably an overestimate because we did not look at the quality of the evaluations.
The House of Representatives is not informed clearly of whether the ministers evaluate he effectiveness of their policies or not. Furthermore, the House receives virtually no information on the reasons for not evaluating policy effectiveness. We found that policy effectiveness was considered in half the policy scans performed by the ministers between 2006 and 2010.
Ministers should evaluate the effectiveness of their policies, as laid down in the Government Accounts Act. They should also improve their scans of policy effectiveness. A comprehensive programme of policy scans should be introduced in accordance with the Central Government Budget Regulations. If a minister thinks an effectiveness audit is neither feasible nor desirable for a particular policy measure, he should explain his reasons to the House of Representatives and reconsider the benefit and need for the policy, with the possible outcome being that the policy is terminated. Finally, the ministers should improve the quality of the information they provide to the House of Representatives on the policy evaluations they carry out.
The Minister of Finance responded to our audit on behalf of the government. He wrote that he agreed with most of the recommendations and undertook to improve the provision of information to the House of Representatives by providing a modified internet file known as 'Evaluation and Audit Overview'. The minister did not respond to our recommendation to ensure in advance that there is a comprehensive evaluation programme. We would note that there is a risk here. If it emerges when a policy scan is prepared that the effectiveness of the policy in question has not been audited or, at best, has been inadequately audited, the House of Representative will be left empty handed.