Six basic principles

Spending public money wisely and well: how to put basic principles into practice.

We have therefore articulated six basic principles, which we think are relevant to the use of all public funds.

  • Accountability – Public entities should be accountable for their performance and be able to give complete and accurate accounts of how they have used public funds, including funds passed on to others for particular purposes. They should also have suitable governance and management arrangements in place to oversee funding arrangements.
  • Openness – Public entities should be transparent in their administration of funds, both to support accountability and to promote clarity and shared understanding of respective roles and obligations between entities and any external parties entering into funding arrangements.
  • Value for money – Public entities should use resources effectively, economically, and without waste, with due regard for the total costs and benefits of an arrangement, and its contribution to the outcomes the entity is trying to achieve. Where practical, this may involve considering the costs of alternative supply arrangements.
  • Lawfulness – Public entities must act within the law, and meet their legal obligations.
  • Fairness – Public entities have a general public law obligation to act fairly and reasonably. Public entities must be, and must be seen to be, impartial in their decisionmaking. Public entities may also at times need to consider the imbalance of power in some funding arrangements, and whether it is significant enough to require a different approach to the way they conduct the relationship.
  • Integrity – anyone who is managing public resources must do so with the utmost integrity. The standards applying to public servants and other public employees are clear, and public entities need to make clear when funding other organisations that they expect similar standards from them.

The new funding framework explores what these principles mean in practice across a range of different types of funding arrangements and across the life cycle of each of those arrangements. When we put these two dimensions together, they provide the two axes of a matrix for some concrete guidance to entities.

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