The effectiveness of public spending, while the accounts are in the red, is a completely ignored issue. That’s unfortunate. France could improve both its budget management and the performance of its public services, writes lawyer Mehdi Bournissa.

France’s public debt has reached more than 118% of GDP, compared to less than 60% for almost half of the 27 European Union member states. These states have all made methodological investments in favor of efficient management.

The lazy alternation of reckless borrowing and blind cuts has rendered political alternations artificial, leading to inertia and then discredit. Thus, of the 400 objectives and 800 performance indicators provided by the Organic Law on Finance Laws (LOLF), 94% remained unchanged between the 2017 budget of the Socialist majority and the 2019 budget of the En Marche majority.

This lack of control has become so exaggerated that the 2020 finance law included a net reduction of 47 civil servant positions and a €1 reduction in the audiovisual license fee. These are more accounting adjustments than measures that foster effective management of public policies.

Lack of Control
The warnings from the Court of Auditors are increasingly alarming, criticizing ‘insufficient control’ and ‘significant discrepancies between forecast and execution,’ to the point of ‘unreliable accounting’ that prevents the certification of some social security accounts.

This diagnosis is all the more evident given that increased budgets for ministries like health and education, fueled by high debt and the second-highest tax pressure among OECD countries, have failed to stop the degradation of public services.

The priority is not to spend more, without results, or to spend less, placing the burden mainly on young people and families, but to make public spending meaningful.

Zero Performance Culture
In 2000, the Court of Auditors advocated for modernizing the budget process because ‘the majority of the budget is carried over year after year without being reassessed, even for expenses that have become unnecessary.’

Despite the adoption of the LOLF and, in parallel, reforms like the RGPP, MAP, and since 2017, AP 2022, the trajectory remains unchanged. Thus, almost 20 years after the adoption of the LOLF, more than two-thirds of program managers surveyed by the Court say that budgeting is not linked to performance.

This absurd situation stems primarily from a plethora of hastily constructed objectives and indicators within central administrations, imposed without proper education or consultation on decentralized administrations, operators, and public institutions.

Furthermore, these objectives are of varied nature and are not ranked in importance, meaning there’s no distinction between high-level strategic objectives (such as reducing inequality) and operational objectives tied to program managers (such as ensuring quick access to public services), creating confusion, and leading to a lack of accountability for politicians, while making the aggregation of indicators meaningless.

Moreover, on average, more than 15% of the indicators are not even provided, reaching up to 61% in criminal justice or 74% in employment return policy. Worse, they are often inconsistent and contradictory. In education, for example, the reduction in the repetition rate is considered a performance indicator, even though it says nothing about knowledge retention in later years, and its use is discouraged by the National Council for the Evaluation of the School System.

A Reset of Budgetary Management
‘France has decided to reform the State through the budget,’ summarized Philippe Seguin. State reform requires dynamic and participatory control of public management, beginning with the development of fewer, coherent, and intelligible indicators, from the ground up, to allow for harmonization and control at the national level on a multi-year basis.

This demanding exercise, associated with the principle of justifying every euro, already provided by the LOLF, would enable a reset of public management and the emergence of a modern State anchored in a results-oriented culture.

Careful and efficient management of public funds is the counterpart of tax consent and could help repair — at least partially — the damaged relationship between the people and the State.

Mehdi Bournissa is VP at DP WORLD, a specialist in taxation and international trade issues.