Better Regulation, a Budget Focused on Results and Budget Mainstreaming: towards more aligned or more demarcated processes?

This paper addresses the nexus between the EU’s Better Regulation (BR) programme and EU budgeting. The annual EU budget as such and the underlying own resources decision and multi-annual financial framework are not covered by the BR programme. However, based on art. 34 and 209 of the Financial Regulation, EU programmes that involve considerable spending (i.e., over 5 million euro), as well as the use of (similarly significant) financial instruments and budgetary guarantees, are subject to the BR requirements of ex ante impact assessments, monitoring and evaluation. EU budgeting also has its own «good governance» programme: a Budget Focused on Results (BFOR), introduced in 2015, based on the recommendations of the 2010 EU Budget Review. BFOR is a performance budgeting programme which addresses EU budget decision-making both ex ante and ex post, through a strict focus on the results (i.e., impacts) of the use of budgetary resources, including increased quality of monitoring and reporting. To complicate things, the EU also introduced so-called budget mainstreaming (BM) in the areas of climate change, biodiversity, and gender equality (with some first similar steps being taken for the SDGs in general, and for digitalisation). Budget mainstreaming concerns the mainstreaming of political priorities in the budget by means of spending targets, budget item tagging, performance tracking, and reporting. Already in 2017, the OECD (in its independent assessment of BFOR), argued that the BR and BFOR initiatives are targeted at different policy-making communities and are not completely aligned, even though there are large areas of commonality between the programmes, in terms of quality evaluation and evidence-based decision-making. The OECD recommended stronger coordination, a re-casting and broadening of some elements of BR and/or BFOR, and -maybe- even a more holistic re-branding of these processes (i.e., integration of BR and BFOR). In 2022, the European Court of Auditors (ECA) identified some major deficiencies in the actual implementation of BM. One of the points of criticism was the incomplete link between BM and the use of BR impact assessments. Even though for some political priorities explicit impacts have been included in the BR Guidelines & Toolbox (see also Groenendijk, 2023, specifically on digitalisation and budget mainstreaming), there is generally insufficient alignment of the EC’s political priorities (and BM) on the one hand and the BR framework (with its very diverse set of impacts, that has also expanded considerably since the start of BR in 2005) on the other hand, despite the 2021 update of the BR Guidelines & Toolbox. Following an introduction, the paper first identifies commonalities and differences between the three processes (BR, BFOR, and BM), based on the analysis of both legislation and relevant policy background documents and concrete output of the different processes. Secondly, it discusses the needs -in the EU context- for evidence-based ex ante policymaking and ex post evaluation. Thirdly, and finally, it addresses the question whether these needs are best covered by one integrated and aligned process or by several smaller well demarcated processes.