Results-oriented Budget Practice in oecd countries odi working Papers 209

budget making and target setting. Without this link there will be no confidence in 
performance targets and targets may become arbitrary or of secondary importance. 
•
budget making with monitoring and reporting of performance. This links allocations to 
performance and raises questions of how to increase incentives for performance. 
•
budget implementation with performance measurement. Month by month budget allocations 
may change because of external factors but performance measurement systems may not be able 
to detect the contribution of those changes to effectiveness. 
•
the accounting system and the performance measurement system. Often accounting systems 
are aggregated at the level of the department whilst performance measurement systems may 
measure the performance of individual delivery units thus making an efficiency dialogue 
problematic. 
Thus, Pollitt concludes that “the literature reviewed does not permit any firm generalisations to be 
made about the relative importance of different single variables, but the level of decision making 
does seem to be mentioned with particular frequency, and clearly both the type of budget and the 
prevailing accounting system go a long way towards determining where the ‘starting line’ is for any 
exercise in integration” (Pollitt, 2001, p 26). He sets out a table of contexts where integration 
would be easier and more difficult. This is reproduced as Table 7. 

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Table 8: Key variables for integration
Integration would be easier in a context 
where: 
Integration would be more difficult in a context 
where: 
• Strategic target/objective setting is 
linked to resource allocation. 
• Historical incrementalism is the basis of 
resource planning and allocation. 
• Global or output-based budgeting is 
in place. 
• Line item budgeting is in place. 
• Full cost activity accounting is in 
place.
• The accounting entities do not match the 
units in which programme activities are 
carried out and performance is measured. 
• The programme in question consists 
of a set of tangible and measurable 
products or services. 
• The programme consists of non-
standardised, non tangible, “ideal”, 
services.
• Integration is being attempted at the 
levels of programme priorities 
management and operational 
management.
• The effects of the programme can only be 
detected in the long-term. 
• The impact of a programme can be 
seen soon after the services or 
products are delivered. 
• Even when “result[s]” are detected, 
attribution to the programme is uncertain. 
• The results (outcomes) can be 
attributed to the programme with high 
confidence (rather than there being 
reason to suspect that they were 
caused by other factors). 
Source: Pollitt, 2001, p 27 
For the 2000 UK Spending Review, decisions on budgets and targets were made simultaneously 
and considered by the same Cabinet committee ensuring “negotiation of outcome measures is part 
of the budgeting process” (Ellis and Mitchell, 2002, p 121). The move to resource accounting and 
budgeting enabled a link to be made between resources and objectives. 
Pollitt makes a number of proposals: First, “is performance data routinely included in the main 
budget document?” There then arises a set of further questions about the extent to which these 
questions are considered by the executive, the legislature and auditors; and the quality of this 
information, its stretch over time and the nature of scrutiny. Second, “do programme and 
operational managers routinely integrate financial information and performance data in their 
stewardship of programmes?” There follow a set of further questions on techniques used in this 
process including links to corporate planning process and the use of rewards and sanctions for 
success and failure. Third, “are plans in place to enable the jurisdiction to move firmly towards the 

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progressive integration of financial management systems and performance management systems 
and to encourage all the principal stakeholders to make good use of both types of information?”
The sub questions address issues including staff training in performance and financial management, 
and links to the achievement of public policy objectives.