Transcript of the meeting:

Dmitry Medvedev: Good afternoon. Please take your seats. I can see it’s August since so many ministers are absent. I think next week only half of the seats will be taken.

Nevertheless, we can’t let this sidetrack us as we have some important issues on the agenda. I will outline them first before we start our discussion.

One of the key priorities in the government’s work, that I always emphasise and that is always included on our agenda, is the efficiency and transparency of our public administration and governance. We are going to discuss the performance of the regional executive bodies for 2011. As you know, the performance of the regional officials is evaluated against certain criteria that were introduced recently. These reviews provide an objective insight into the work of the regional government officials and motivate them to serve the interests of the public. First, this review concerns the most sensitive areas such as healthcare, education, housing and public amenities, road construction and economic development in general. We must also remember that the organisational structure of the regional governments is undergoing some changes, which includes adopting information technology in everyday work. Energy efficiency and energy saving deserve our closest attention. To reward the leading regions, we are allocating them grants of one billion roubles based on an assessment of their performance. However, despite this substantial funding and creating the conditions for the development of the regions, many of them are still failing to make significant improvements or carry out any major changes. I’m referring to the key indicator – improving people’s living standards. That is why we must streamline the system of performance indicators. Their number has to be reduced (this task has already been set) and they have to be more clearly defined. They have to allow us to be as objective as possible in assessing the performance of the authorities. I hope this will eventually create additional incentives for improving regional government and will allow us to use the positive experience throughout the country.

The second issue concerns the distribution of subsidies to the regions for their targeted housing programmes in 2012. I’m referring to the federal targeted programme Housing for 2011-2015. This year’s budget has allocated more than 2.4 billion roubles for this purpose. This money will be given out on a competitive basis. After the results are reviewed (which is the responsibility of the Ministry of Regional Development), 26 regions will receive these funds. They will use them to reimburse the cost of interest payments on loans taken out to build utility and communication infrastructure in new urban districts, as well as to construct and modernise energy-efficient enterprises in the construction industry. They will also use these subsidies to co-finance projects on building social infrastructure facilities, which are much in demand and very important for the regions, as well as for the construction of roads. I hope that on a par with other mechanisms this federal assistance will encourage active housing construction in the regions. We discussed this at a meeting very recently – on August 10. The goal remains the same – to resolve the housing issue by increasing the amount of new housing and making it more affordable for people (I’m referring to all the options at the disposal of the government and commercial companies that are involved in these efforts).

In the near future the government will start drafting a state programme to provide Russian citizens with affordable and comfortable housing and utilities. This programme will focus on developing economy class housing and infrastructure facilities. And we need to continue the work that has been done so far.

I’d like to mention one more issue. I said at the beginning that the key task is to ensure the transparency of the executive authorities. Officials need feedback from the public. It is important both to hear what is said and to let the public influence those decisions that directly concern their interests. They should be able to discuss normative documents and decisions online and using other communication technologies. Today we’ll consider a government draft resolution that will establish procedures to guide the federal executive bodies in publishing information on draft normative acts and results of their public discussion. These rules determine the range of departmental documents that are the subject to public discussion, including drafts of new government and federal targeted programmes. They also set out the time frames for the public discussion of the documents. Under the plan, all information on such acts will be published on a single website. The discussion can last for at least 15 days or 60 days in the case of more complicated acts. Proposals will be published on the same site. I hope this mechanism will improve the legislative activities of departments and make decision-making more open in this country.

Let me recall that we have also agreed to take all the required measures for the drafting of delegated legislation in parallel with the adoption of laws the drafts of which we are currently discussing. I have agreed this with the State Duma deputies as well. This is the right thing to do. This is in fact a question of legal culture. Let’s start the discussion of this and other issues.

Dmitry Medvedev: Let's start with the first question and review the performance of the regional executive bodies in 2011. Minister of  Regional Development Oleg Govorun, over to you.

Oleg Govorun: Mr Medvedev, colleagues, in accordance with the presidential executive order and the government resolution, the Ministry of Regional Development has been evaluating the performance of the Russian regional executive bodies since 2008. For the second consecutive year, we’ve been using an integrated approach that includes static and dynamic performance benchmarks. To assess the performance of regional governments we are using 74 indicators in four areas: public administration, education, healthcare and housing and utilities services. These calculations take into account the performance results and their assessment by consumers, as well as the efficiency of budget spending. The dynamics are calculated as a standard deviation of the region’s performance levels compared with the base year. These levels and the differently-weighed efficiency dynamics are added to give a comprehensive assessment of the region. Opinion polls on public satisfaction with the activities of regional authorities are held three times a year in all the Russian regions. They involve over 150,000 respondents. According to the 2011 poll, the only area to record a slight increase in consumer satisfaction was healthcare, where satisfaction levels went up from 34% in 2010 to 36% in 2011. The proportion of people positively assessing public administration activities of regional authorities has gone down from 40% to 38% during the reporting period. The education sector scores highly, but nevertheless here too there has also been a slight decrease from 65% down to 63%. The figures for housing and utilities services are down from 24.5% to 24%.

Following the comprehensive assessment in 2011, the Ministry of Regional Development identified the 10 best-performing Russian regions, which include the Republic of  Tatarstan, St. Petersburg, the Tyumen Region, the Chuvash Republic, the Perm Territory, Moscow, and the Omsk, Tambov, Kostroma and Astrakhan regions. Among the leading regions, the most significant improvement, up 19 points, was identified in the Astrakhan Region. The Yamal-Nenets Autonomous Area and the Pskov Region improved their ranking by 20 points.  The worst performers included the Republic of Sakha (Yakutia), the Tver and Sakhalin regions, the Republic of Kalmykia, the Magadan Region, the Republic of Tyva, the Khabarovsk Territory, the Republic of Dagestan, and the Arkhangelsk and Oryol regions. The Khabarovsk Territory recorded the biggest downturn, losing 20 points.

In accordance with the government resolution of August 14, 2008, the grants will be allocated to the 10 leading regions. As you mentioned earlier, Mr Medvedev, the total amount of allocated funds is 1 billion roubles. The amount of subsidies going to each region is determined by their comprehensive assessment value and varies from an average of 70 million roubles for the region in 10^th place to 160 million for the region that came first. The draft government resolution on the distribution of subsidies has been agreed with the Ministry of Finance. I ask for your support.

Colleagues, the evaluation system has been instrumental in motivating the regional authorities and identifying problems in various fields of public life. Regions have learned to track and include in their work indicators for evaluating their most important activities. Many regions have substantially reduced inefficient spending. I would like to quote a few examples, such as the significant reduction in inefficient spending in St. Petersburg (20%), the Omsk Region (34%), the Republic of Mari-El (41%) and the Primorye Territory (68%). Inefficient spending across the country as a whole fell by 7% in 2011. In education, inefficient spending stood at 21% in 2007, in 2011 it was 12%.

However, today we need to improve the existing system of assessment: there are too many indicators and the true value of the most important indicators tends to get eroded. The Ministry of Regional Development, together with the presidential administration, the executive office, the regional authorities and representatives of the Open Government, has prepared a draft presidential executive order On Evaluating the Performance of the Executive Bodies of the Russian Regions. It incorporates a new approach supported by the overwhelming majority of the regions.

In this way comprehensive evaluation becomes a much less complicated procedure: instead of the 74 indicators used currently the proposal is to use just 11 basic ones, which would cover the performance results for the regional authorities in the areas of the economy, demography, education and housing construction. We believe that these indicators will encourage regional authorities to achieve the strategic goals set in the presidential executive orders of May 7, 2012, i.e. to increase the rates of economic growth and improve people’s quality of life. The new evaluation system should take into account problems that are specific to individual Russian regions. The Ministry of Regional Development has proposed providing the regions with a choice of two benchmarks from a separate list (this list currently includes about 30 indicators), covering those areas where they need to radically improve. Additional indicators and their numerical values ​​will be approved by an interdepartmental commission. Following the approval of the order by the Ministry of Regional Development, a draft government resolution on measures to implement it will be drawn up within one month. The resolution will include the methodology for carrying out the performance evaluations. Thank you.

Dmitry Medvedev: Mr Govorun, will these consolidated indicators actually work?

Oleg Govorun: We believe they will.

Dmitry Medvedev: I am asking this because I remember that in order to liven up a discussion of a particular issue, I would suggest adding a corresponding indicator to the reporting provided by the regions. It didn’t make things any better, but the indicator was still added. With regard to these consolidated indicators, aren’t we in danger of missing key ones with regard to the quality of life if we adopt them?

Oleg Govorun: We have tried to include the various areas that are particularly sensitive for people. We believe that this is the optimal set of indicators.

Dmitry Medvedev: The number is optimal, no doubt. The main thing is that they really do cover all areas of life, so that we can use them to assess the real state of affairs in a region. Well, all right. Are there any questions for the speaker? Please, Mr Fyodorov.

Nikolai Fyodorov (Minister of Agriculture): Mr Medvedev, I believe we will miss certain things if we use this technique and ignore the numbers of the rural population in Russia, which varies from 4% in the Magadan Region to 72% in the Republic of Altai. Average indicators for the effectiveness of regional administrations do not provide sufficiently objective and reliable information. Overall, the situation in a region may look good, but given the fact that the rural population is moving to urban areas or dying out, it may in fact be critical in a particular region. Therefore, we propose including in these indicators, without expanding the list of indicators... For example, we can include the investment in fixed assets, real disposable incomes in a particular region or life expectancy, including in rural areas. Then it will be objective information which will encourage regional authorities to focus on such issues. Mr Medvedev, you are very familiar with the subject matter and you have mentioned the importance of this factor on many occasions. I would like to have this included as well, if possible.

Dmitry Medvedev: Thank you. Please take note of this, because this concerns at least one third of the country.

Oleg Govorun: It does.

Dmitry Medvedev: Thank you. Are there any other questions or comments? Any questions for Mr Govorun? Please have a seat, although you have another report to deliver soon.

Are there any other comments on this issue? Please go ahead.

Mikhail Abyzov (Russian Minister): Mr Medvedev, colleagues, we have been working together with the ministry on streamlining the performance indicators and have held expert hearings in which governors have participated. It should be noted that these 11 indicators really do cover all the areas for monitoring and evaluating the performance of regional authorities. We agreed that we will develop the methodology for decomposing these indicators into components as we develop the guidelines for regional authorities. These components will make it possible to control things that were mentioned here, including the specifics of rural areas or healthcare, because this methodology uses higher-level indicators. For example, the infant mortality indicator will become a separate second-tier indicator. In other words, the most significant issues will not be overseen, while the approach based on using an integrated evaluation will help keep the number of indicators in check. Under the other scenario, we had about 70-80 of them anyway, which makes them extremely difficult to manage. Therefore, although they are compact, we believe that they still embrace the entire sphere of control and monitoring, and they are exactly the benchmarks that are required for the goal you set.

Dmitry Medvedev: Thank you. Any other comments? Yes, please go ahead.

Viktor Ishayev (Minister for the Development of the Russian Far East and Presidential Plenipotentiary Envoy to the Far Eastern Federal District): Mr Medvedev, colleagues, as a former governor, I support the idea of ​​streamlining performance indicators. There were lots of vague indicators that were often ignored. Therefore, streamlining them and prioritising things will help keep the situation under control. That’s my first point. The second point is about the rural population. This is a very delicate and sensitive issue, because urbanization is a worldwide process, including in Russia. It’s a fact of life; therefore, rural indicators should be considered, but we need to identify which ones will work for us. We can’t approach this issue in purely mathematical terms. Thank you.

Dmitry Medvedev: I see. Why has this indicator for the Khabarovsk Territory changed so much? Justwondering. Is this also the result of some arithmetic calculations?

Viktor Ishayev: I am not working in that region for three and a half years.

Dmitry Medvedev: I see. Are there any other questions for Mr Govorun? No? Then let’s take a protocol decision on the first issue. Agreed?

The second issue on the agenda is to do with the distribution of subsidies from the federal budget among the Russian regions. The funds have been allocated to promote housing construction sub-programmes under the federal targeted housing programme. Please go ahead.

Oleg Govorun: Mr Medvedev, colleagues, the Ministry of Regional Development has put together a draft government executive order on the distribution of subsidies under the sub-programme to promote housing construction in Russia. Subsidies cover building economy-class housing which is affordable, energy efficient and environmentally safe in those Russian regions that met last year's housing construction targets. With this in mind, the government is issuing subsidies to regional budgets which can be used to pay off loans taken out for building engineering infrastructure and land plots intended for building economy class housing; for reimbursing service payments on loans for building or renovating energy-efficient construction industry enterprises; for building or renovating social infrastructure facilities as part of projects for the comprehensive development of areas intended for building economy-class housing; and for building or renovating roads in new economy-class housing developments. Subsidies are allocated to those regions that passed the annual competitive selection in accordance with the procedure approved by the Ministry of Regional Development. The availability of a regional targeted programme is a key prerequisite for being admitted to such a competition. The programme should primarily include territorial planning documents, a streamlined procedure for allocation of building parcels for low-rise construction, as well as the promotion of the local construction industry. Twenty-six regions complied with the requirements this year. They will receive state support. The list of capital construction projects has been agreed with the Ministry of Economic Development. The total amount of funding allocated from the federal budget is 2.4 billion roubles. The draft order has been agreed with the Finance Ministry. I ask you to support it.

Dmitry Medvedev: Are there any questions for the speaker regarding the distribution of subsidies? No? Please take a seat, Mr Govorun.

Okay then, let’s adopt the decision on the distribution of subsidies. This is an important subject. I hope that something good will come out of it. Agreed?

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