TNAG-2472-FCO40-3599-Confidential-talks-between-the-UK-and-China-regarding-financ-1992 — Page 34

14-001-1992

12:09

FB GS

+ 852 868 5279

P.35

(ii)

to keep the growth rate in real terms of public expenditure in line with the trend GDP growth rate, thus allowing the size of the public sector to gradually become larger innominal terms. We currently use this second alternative.

- Related to the above is the problen on the

treatment of staff

staff increments and adjustments in salary structure Of certain grades in the civil service (as opposed to general pay increases) : whether these should be regarded as real growth or price increase.

Paperb (P.8013)

(IV) Resource allocation

of Policy Secretaries, there is a of sufficiently detailed

On the part perceived lack

་

knowledge of their departments' operations which hampers the efforts of Policy Secretaries in reviewing priorities of existing activities and in exploring opportunities for redeployment of This has tended to result in the "easy option" ike. an "incremental" approach no new money, no new activities

resources.

-

being adopted.

-

There is also a tendency of over-emphasis on one budget year with inadequate regard for the medium to long term impact of spending decisions (although the 1992 exercise has changed this to а great extent

extent in the key programme areas) and to concentrate solely on inputs (i.e, cash cost) rather than outputs and lack of full allocation of costs to an activity So that inputs are

under-stated.