The Capital Budget

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DESCRIPTION OF THE CAPITAL BUDGET

The Capital Budgets represents the link in the economic management system between the short priorities and the short-term allocation of financial resources. Therefore, the capital budgets provide the final link between the long-term planning framework priorities and the allocation of investment resources. However, in our case, the capital budget shows estimated spending over a three-year period in addition to the sources of financing.

The Capital Budgets are the financing and implementation tool for the Public Sector Investment Programme. They are the major tools by which government implements its public investment strategies and by the extension of its development agenda and policies. Of course the rationale for Capital Budgets programmes and projects are given in the Budget Speeches which normally forms part of the Budget Document.

The recent practice has been to present project details such as name, number, source of financing, estimated capital cost, expenditure to date, estimated expenditure for the date, estimated expenditure for the immediate two years ahead and explanatory notes. The explanatory notes usually describe the location of the physical components of the project. In addition, the Capital Budget is present on a ministry basis rather than on a departmental basis as is the Current or Operating Budgets. In terms of types of financing, the Capital Budgets, after being ordered by ministries, shows whether the resources are coming from the Central Government current surplus, external loans, domestic loans or giants. The Capital Budgets also infers the Civil Servant who is accountable to Parliament for spending on the project.

The Budget documents are available from the Ministry of Finance although certain parts are found on this website.

THE CAPITAL BUDGET PROCESS

The development and administration of the Budgets are co-ordinated by the Ministry of Finance although line ministries and departments are independent operating centres for certain aspects.

The budget process begins with a Budget Call which serves to guide operating units as to the financial parameters on spending, accountability and programme selection criteria. Of course, the operating unit choice of programmes and projects is guided by the overall priorities and the development strategies established by the Executive Council. The Budget Call Circular merely guides the Ministries and Departments in the preparation of their submissions.

Budget submissions are effectively by ministries and our form of Programme Budgetting normally adds an inflation escalator on the budget of programmes being retained from the previous year. All new projects and programmes are treated as new initiatives and must fall within the criteria established for financing. Such criteria include consistency with priorities and procedures established by the Ministry of Finance. Ministries are allocated a certain amount of money for distribution to itself and its various departments in accordance with overall priorities. The Budget Committee of the Ministries which include all Heads of Departments determines which programmes go forward as new initiatives.

The Capital Budget is constructed by the ministries after consultation with the Heads of Department. The programmes and projects proposed to the Budget Caucus are required to conform with the priorities and procedures established for public investment selection. The investment measures proposed are then compared against each other in the competition for quantum of financial resources available.

The Budget Caucus makes the final recommendations for Executive Council approval and subsequent approval by the Legislative Council before implementation is authorized.

RECENT CAPITAL BUDGETS

(in preparation)