1. Use it or Lose it: Corporate Over-Planning in the Air Force
- Author:
- Ross Fetterly
- Publication Date:
- 01-2020
- Content Type:
- Policy Brief
- Institution:
- Canadian Global Affairs Institute (CGAI)
- Abstract:
- The Canadian government allocates funds to departments through the annual federal budgetary process. With a Department of National Defence (DND) budget in the fiscal year 2019-20 of close to $22 billion,2 and expenditures spread out across a broad range of very different and distinct activities, expending the full allocation can be a significant challenge. While federal departments are permitted some carry-forward of eligible lapsing funds from one fiscal year to the next, in fiscal year 2018-19 the amount designated was up to five per cent of the operating budgets in their Main Estimates.3 With the federal government projecting significant budgetary deficits in the coming years, restricting or eliminating carry-forward of funding may be limited or eliminated to reduce deficits. Past practice within the department has been for the Investment Resource Management Committee (IRMC), chaired by the deputy minister, to decide on funding allocations of the carry-forward, based on departmental corporate priorities. While from an institutional perspective that aligns funding with optimal funding requirements, the consequence to organizations such as the Royal Canadian Air Force (RCAF) is that only a limited amount of lapsed funding may be allocated the following fiscal year. Thus, the air force has a significant incentive regarding its budget: to “use it or lose it”.4 RCAF corporate over-planning (COP) is a principal in-year strategy to maximize the use of allocated financial resources. Yet, at the operational and tactical level, the concept and application of in-year over-planning is not sufficiently understood. This paper will frame over-planning within the context of the RCAF and then recommend strategies to integrate over-planning into the air force culture. Corporate over-planning is essentially a means toward an end; specifically, that of maximizing output given by defined resource allocation. The paper will first consider defence planning approaches and budget allocations, and then consider the strategic environment within which the organization operates. The third section will emphasize the need for change in how the RCAF manages financial resources, followed by a section on adapting to change. The fifth section will review the concept of over-planning. That will be followed by a discussion of RCAF institutional corporate over-planning. The seventh section will consider budgeting as communication and how this supports maintenance of a common operating picture within the RCAF on over-planning. The final section will focus on RCAF corporate over-planning by discussing the structural unexpended rate, applying an absorption rate in operations and maintenance activities, and planning investment opportunities.
- Topic:
- Government, Armed Forces, Military Affairs, and Budget
- Political Geography:
- Canada and North America