Balancing budget control and flexibility: the central finance agency as ‘responsive regulator’

This paper explores how the increasing need for budget flexibility might be reconciled with the necessity for control of public money by reframing the relationship between central finance agencies and spending agencies in ‘regulatory’ terms. The need arises because governments increasingly face complex, non-routine problems, which require them to develop greater capacity for collaboration and ‘flexibility’. At the same time, the public expects government to be accountable for how resources are used, which is conventionally framed in terms of procedural regularity. After surveying the contours of flexibility and the different ways budgeting practices inhibit collaboration in the public sector, the paper uses responsive regulation perspectives to explore how reshaping the type of rules and the way they are applied, rather than fewer rules, is a preferred means of balancing central control and situational flexibility.