State institution chiefs: Budget cut proposals awaiting political decisions

According to the heads of Estonia's state institutions, cost-saving opportunities exist, but significant cuts must begin with legislative and regulatory changes — and they are continuously proposing areas where expenses could be reduced.
Each year, a couple of thousand bore wells are built in Estonia, and their local government-issued building permits currently require the additional approval of the Environmental Board. According to Environmental Board director general Rainer Vakra, the board has been working for seven years already to eliminate this duplication of work between local governments and the state institution.
This January, the Environment Committee of the Riigikogu discussed a bill that would require the board to assess only projects involving bore wells with a significant environmental impact going forward.
"And then the discussion went on for hours, and concluded that, just in case, it would still be a good idea right now for the Environmental Board to review these projects," Vakra recalled. "Because maybe local governments don't have enough knowledge and expertise [on the matter]."
The same topic is now being discussed in the Riigikogu. According to the director general, however, this isn't the only example.
"The Environmental Board has quite a lot of responsibilities and bureaucracy that could be reduced, but they stem from legislation; they're not something the board itself has come up with," Vakra explained.
The Nature Conservation Act and the Forest Act are two other such examples, amendments to both of which the board expects will provide significant relief. "These have been kicked down the road for years, and decisions have been left unmade," he pointed out.
Health Board would cut cafeteria inspections
More than a year ago already, the Health Board compiled a long list of things that could be done differently if the agency had access to a sufficient amount of data. The second section of this list included proposals for areas where the state should no longer intervene.
According to Health Board director general Birgit Lao, the Ministry of Social Affairs took a conservative approach to their proposals.
"It seems as though fairly bold decision-making is necessary to say, 'Yes, we agree with this,'" Lao said. "Usually, the response is, 'Don't conduct oversight, don't allocate resources to this as an agency, but let's keep this obligation in place on you just in case it's needed someday. But that's exactly what shouldn't happen."
The Health Board believes regulations and oversight could be reduced in several areas, ranging from chemicals to swimming pool water. Lao cited school cafeterias as one such example, where officials must check whether students are being offered enough protein, iron, calcium and other essential nutrients.
"Perhaps consumer demand is already high enough that the state doesn't need to dictate what children must eat or not eat," she said. "I believe we can better achieve this through counseling and guidance materials than by having an official inspect kitchen operations."
Both Lao and Vakra said that on their own, their respective institutions could only scale back their activities to a certain extent. Larger reforms require changes to mandates — whether by ministerial orders or legislative amendments.
"But I believe we'll start making progress — the timing seems right," Lao added.
In an appearance on Vikerraadio's "Vikerhommik" on Tuesday morning, Eesti 200 chair Kristina Kallas said that some state institutions should be fundamentally restructured or shut down altogether. She believes that institutions themselves are unable to identify enough opportunities for cost savings.
"This has to happen externally — meaning a person or team that is not part of the system itself must be able to actually step back and assess this regulatory maze and determine what should be eliminated," Kallas said.
Education and Youth Board (Harno) director Jaak Raie said that his agency is already utilizing such external reviews.
"The primary benefit I see in external experts is that they ask questions that insiders, due to their subjectivity, cannot ask," he noted.
Cutting exam proctors sees six-figure savings
Raie likewise noted that his board ultimately carries out the tasks assigned to it by the Ministry of Education and Research. Some of these are codified in law, while others are governed by regulations. For example, Harno was assigned additional duties this year. As these new responsibilities were linked to EU funding, the board was also given additional money to fulfill them.
At the same time, state-funded budget lines were expected to achieve significant savings this year.
"In terms of the state budget, however, the list of tasks for Harno did not decrease," the director pointed out. "And now we have to assess which services are essential and cannot be cut, and which services [can be] with minimal impact."
Harno's €108 million budget helps to illustrate the choices involved in such budget cuts. €93 million of this budget comes from external funding, while the €15 million it receives from the state budget is divided among ten different services. Some of it is broadly structured as funds — such as a €3 million fund for supporting new teachers — while others involve operational activities, such as organizing exams.
These ten services provide the basis for Harno's budget cut proposals to the ministry. For example, discussions could include whether certain scholarships should be reduced, or whether some internal services could be organized differently. Raie says the board regularly submits such proposals to the ministry.
One such proposal recently led to the repealing of a rule requiring an external proctor at state exams.
"I believe we can fully trust schools with these matters," Raie said. "Schools have administered exams time and time again. This was a budget cut decision made within a single service, and its impact amounted to a six-figure sum."
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Editor: Merili Nael, Aili Vahtla