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Renovating the organization and operation of public non-business agencies, contributing to completing the socialist-oriented market economy
4/4/2018 10:36' Send Print
The 6th Plenum of the 12th Party Central Committee discusses the project on renewing the management and financial mechanisms and re-arranging the system of public non-business agencies. Photo: VNA

Significant results in renewing the organization and operation of public non-business agencies

Over the past years, the Party and State have issued many important documents and actively led and guided the whole political system to implement lines, policies, measures to renovate the organization and operation of public non-business agencies (PNB). Particularly, the Political Bureau's Conclusion No. 37-TB/TW dated 26 May 2011 on the Program on Renewing the operation mechanism of public non-business agencies, stepping up socialization of a number public non-business services and the Documents of the 12th National Party Congress clearly define the task of "Renovating the organization and operation of public non-business agencies in the direction of enhancing autonomy and accountability in apparatus, personnel and finance; socialization of the public service sector, attracting different economic sectors to this field"(1); "Restructuring public non-business agencies, assigning appropriate autonomy, improving administration capacity, and operation efficiency according to business mechanism."(2) "Diversifying forms of socialization of public non-business agencies, such as piloting equitization of PNB agencies, assigning the community to manage, lease facilities and assets of the State to supply public services and implement the mechanism to let PNB agencies to operate as public service businesses."(3) Realizing the Resolution of the 12th National Party Congress, the 5th Plenum of the 12th National Party Congress issued Resolution No.11-NQ/TW dated 3 June 2017 on Finalizing the socialist-oriented market economy institution, pointing out clearly: "Finalize the institution, renovation and improve public non-business agencies’ efficiency. Delegate full autonomy and accountability to PNB agencies in terms of scope of operation, organizational structure, payroll, personnel and finance associated with independent evaluation mechanism."

Given efforts of the Government and other committees, ministries, branches and localities significant initial achievements have been made in the renovation of public non-business agencies in terms of organization and operation, contributing to accelerating the process of completing the socialist-oriented market economy in Vietnam.

Currently, Vietnam has about 58,000 PNB agencies, with 2.5 million staff (not including staff in the police, army and the state-owned enterprises). This is a major force, providing most PNB services relating to everybody, every home and the whole society, such as health care, education and training, science and technology, culture, physical training and sports which have covered almost all areas, reaching out to rural, remote, difficult, border areas and islands throughout the country. The PNB system plays a key role in providing PNB services and implementing social security policies, facilitating easy, convenient and equal access for people with increasing quality and more reasonable costs.

Legal documents on PNB agencies have gradually been improved, strengthening decentralization, defining more clearly authority between state agencies at the central, local levels and each administration level. Criteria, conditions for establishment, merger and dissolution of PNB agencies have been issued for the arrangement of PNB agencies in terms of organization, structure and human resources.

PNB agencies have been delegated autonomy in terms of operation, structure, personnel and finance to proactively use assets and human resources to develop and improve the quality of PNB services. Thus, non-business revenue has increased, resulting in cost savings to increase income for employees.

Fees have been changed into service charges, and step by step salary costs will be added to service charges to compensate PNB agencies’ expenditure, reduce current spending of the state budget, especially in the field of healthcare.

Preferential policies on socialization of PNB services (land, tax, credit) have contributed to expanding the network, scale, quantity as well as improving the quality of non-PNB service providers; encouraged PNB agencies, especially universities, hospitals and vocational education institutions to be proactive in attracting investment capital from different sources; and helped pilot equitization of eligible PNB agencies.

More attention has been given to management and use of public finance and assets in PNB agencies. Many of them have promulgated regulations on finance, regulations on management and use of public assets, step by step overcoming wasteful use and misuse of public property on wrong purposes or personal interests and overspending of public assets.

Limitations, weaknesses and major causes

In addition to important results gained, there are still many shortcomings and weaknesses causing public resentment. Besides, there are also many difficulties and challenges to be overcome, especially in the reorganization and renovation policy as follows:

The renewal of PNB agencies’ organizational structure is slow in comparison with economic development and requirements. The planning of PNB agencies’ network has not paid much attention to the planning of branches, domains, regions and real demands. The system of PNB agencies is still bulky, scattered, fragmented, small scaled with too many focal points and overlapping tasks, not yet streamlined and unsuitable to the development of the country. They have operated with low efficiency, some even have suffered losses and waste. The number of people working in PNB agencies has increased, now about four times higher than the allowed number of staff in the political system, especially in education and health sectors.

The State management of PNB agencies have not been effectively and efficiently. PNB agencies’ functions in state management and service supply are not clearly separated.

Many legal documents on PNB agencies have been slowly promulgated or not amended and supplemented in time. Unreasonable and unclear assignment, and decentralization of authority to establish PNB agencies and their staffing are reasons for the rapid increase of focal points and payroll from the state budget.

The quality of executives, managers and staff is not high, productivity is low. The structure of civil servants is unreasonable, with the majority of them have been working in service provision. A limited number of talents are working in PNB agencies.

The financial mechanism has been still inadequate. Public services funded by state budget are high in number. In the period 2011-2016, 44% of the total state budget recurrent expenditure were for non-business sector.

The implementation of the mechanism of autonomy, accountability, socialization in PNB agencies is limited, unstable with low results. Some ministries, branches and localities have not followed closely, and proved to be ineffective and confused in state management of socialization of PNB services. Unhealthy competition, thinking only of making profits, taking advantage of the socialization policy to abuse revenue collection, instranparent joint ventures, and public-private partnership have still occurred.

The limitations and weaknesses are results of both objective and subjective causes with the former as the main one.

The institutionalization of the Party lines into State policies and laws on PNB is slow, incomplete, not synchronous, and not suitable to socio-economic development of the country. Many prerequisite policies for granting autonomy to PNB agencies have been slowly issued, amended and supplemented. Line agencies’ state management and service provision have not been clearly differentiated. Inspection, control and supervision of PNB agencies’ activities have been still limited and there have been no sanctions for violations.

Party committees at different levels, leaders of some ministries, branches, localities and heads of agencies, organizations and units have not taken affirmative and effective measures to direct autonomy delegation to PNB agencies. The management of payroll in PNB agencies has not been strictly implemented.

Communication and propaganda have not been fully effective to raised awareness of PNB services’ beneficiaries to share the costs with State and contribute to pay for the costs.

Key solutions to continue renovating the organization and operation of PNB agencies

The renovation of PNB agencies’ organization and operation in our country in recent years shows that it is imperative to continue improving PNB agencies organization and management, quality and efficiency of operation. This is one of the urgent and essential tasks of political, economic, cultural, social and human significance, demonstrating the superiority of our regime, contributing to rapidly and sustainably develop the country, complete the socialist-oriented market economy, successfully carry out the renovation and accelerate industrialization and modernization of the country.

Given the urgent and imperative significance, the 6th Plenum of the 12th Party Central Committee issued Resolution No. 19-NQ/TW dated 25 October 2017, "On continuing to renew the organization and management, improving the quality and operation of public non-service agencies." This is a very important resolution to concretize key tasks set out by the 12th Party Congress, which has attracted great concern of cadres, party members and people.

The resolution identifies that the renovation of PNB agencies as well as the renovation of State-owned enterprises should be carried out synchronously, affirmatively, cautiously and firmly within the overall plan to renovate the political system to meet the need of socialization of public services (socialization but not commercialization), promote positive aspects, limit the negative aspects of market mechanisms and international integration. It also defines clearly the leadership of the Party, the management of the State, the role as masters of the people; the role and position of PNB agencies in socio-economic development, international integration and the 4th industrial revolution. On that basis, the Resolution puts forth viewpoints, objectives and orientations to continue strengthening PNB agencies’ organization, quality of services and operation in association with socio-political stability in general and specific sectors and fields in particular. It is necessary to base on reality and development levels of our country to review, supplement and perfect mechanisms and policies with high feasibility, especially new breakthrough mechanisms and policies.

The overall objective is: "Radically, comprehensively and synchronously renovate and streamline the system of public non-business agencies so that they are rationally structured, capable of autonomy; operate effectively and efficiently with advanced administration; play a key role in the PNB service market; and provide basic and essential public services with increasing quality. Reduce focal points, overcome fragmentation, and overlapping; streamlining goes with restructuring, and improving the quality of staff. Drastically reduce State budget spending on PNB agencies, raise the efficiency of state budget expenditures for PNB agencies so as to restructure state budget, reform salary system and raise incomes of cadres and civil servants in PNB agencies. Develop PNB market and strongly attract economic sectors to participate in the development of PNB services.” The Resolution sets out eight groups of tasks and solutions to implement specific objectives according to the overall objectives in line with the roadmap from now to 2021 and from 2025 to 2030, focusing on the following issues:

First, push up communication and dissemination of the Resolution in order to raise awareness and create consensus among branches, levels, non-business agencies and the whole society, contributing to raising the quality and effectiveness of activities of PNB agencies, and promote the socialization of PNB services.

Second, arrange and reorganize PNB agencies. Complete the provisions of law on classification criteria, conditions for establishment, merger, consolidation and dissolution of PNB agencies in each branch or sector. On that basis, rearrange and reorganize PNB agencies of each branch or sector. Specifically:

- For education and training sector: Merge or dissolve ineffective universities and educational and training establishments. It is not necessary for each province to have a university. Concentrate on building a number of key pedagogical institutions to train teachers and educational managers. The State makes in-depth investment on material infrastructure and high-quality human resources of public universities in some domains of regional and international levels. Educational and training institutions of the army and police only turn out human resources for the armed forces. The State focuses investment on some high-quality vocational training establishments and vocational education establishments for specific groups suitable to the State's investment capability and the capacity to mobilize resources from society.

- For health sector: Organize comprehensive, continuous and integrated health care facilities in 3 levels (primary healthcare, healthcare level 2, and healthcare level 3). Rearrange units in charge of testing, accreditation, benchmark testing into units in charge of pharmaceutical, food and medical equipment control. Set up centers for the prevention and control of diseases at the same levels on the basis of merging organizations and units having similar functions, tasks and integrated activities. Review, and rearrange regional polyclinics, unanimously apply the model of one multi-functional health center for one district (except districts having grade II-hospitals), and directly manage commune health centers and regional polyclinics (if any).

- For science and technology sector: Together with restructuring of scientific and technological sector, review and rearrange the system of scientific and technological organizations to avoid overlapping, scatter and duplication of functions, tasks and research. Concentrate investment on some institutions working on basic scientific research and applied science of regional and world levels.

- For information and communication sector: Speed up rearrangement of media organization in line with the Plan on development and management of the media up to 2025 approved by the 11th Politburo. Review, rearrange and perfect the organizational model and operation of non-business agencies belonging to the central and local agencies in order to streamline and raise their operational capacity, ensure unified management, direction and regulation of information and communication activities.

- For other economic and non-business agencies: Speed up transforming other economic and non-business agencies into joint-stock companies when conditions come. Dissolve non-productive economic non-business units.

- Regarding social assistance and care for people with meritorious services: Re-organize social assistance facilities to provide support for rehabilitation and community-based groups. Develop centers for nurturing and care for people who have made great merit in conformity with the socio-economic development conditions of the country. Merge centers having similar functions and tasks into multifunctional support centers.

- For agriculture and rural development sector: Rearrange, reduce focal points and improve efficiency of non-business agencies. Merge animal breeding and veterinary stations, plant cultivation and protection stations, and agricultural and fishery extension stations at district level into agricultural service centers belonging to District People's Committees. Review, rearrange, complete and streamline protection forest management boards and improve their efficiency. Put land development centers under the management of District People's Committees.

- Study the merger of Party Political Theory Training Centers with local administrative training institutions, streamline their apparatus, create unity and compatibility among regions, improve the quality and effectiveness of staff training for the political system.

Third, manage payroll and improve human resource quality. Renew the mechanism of identification and assignment of payroll to strictly control and supervise payroll of PNB agencies fully or partially funded by the State budget; accelerate piloting recruitment tests and hiring of chief executive officers at PNB agencies. Sign limited term contracts with civil servants (except PNB agencies in remote, deep-lying areas, and extremely socio-economic difficulties). The public employee system should not be practiced in PNB agencies (except those serving political tasks and state management). Annual assessment and evaluation of civil servants’ performance should be strictly implemented so as to remove those who fail to fulfill their tasks in 2 consecutive years. Classify civil servants according to their job positions, arrange and assign at least 65% civil servants according to their professions.

Renew the mechanisms and modes of recruitment, employment and management of civil servants (including managerial officials). Implement policies to attract talents and professionally qualified civil servants to PNB agencies. Provide re-training and support to redundant civil servants, and laborers due to merger, dissolution or conversion into non-public non-business units.

Fourth, supply PNB services in line with the market mechanism, and socialization of PNB services. Review, modify, amend and supplement mechanisms and policies to facilitate PNB service provision in line with the market mechanism and socialization of PNB service provision. Transform eligible PNB agencies into joint stock companies. Vocational training and educational establishments and health centers in state groups or corporations should not be separated or transferred when these State-owned corporations or groups are equitized.

Implement the mechanism of autonomy and socialization, first of all in higher education and vocational training institutions, medical establishments and scientific and technological organizations in regions with high socialization potential.

Encourage the establishment of non-public non-business units, especially in the fields of education and training, occupational education, healthcare, science and technology. Set up mechanisms and policies to facilitate the establishment of multi-ownership businesses in research institutes and universities in order to carry out application, roll out and commercialization of research results and PNB service provision. Strengthen linkage between vocational training institutions and businesses, encourage businesses to develop vocational education institutions to meet the needs of businesses and the labor market.

Issue favorable policies for science and technology public institutions to have the right to ownership and set up mechanism for reasonably sharing interests from results of scientific research funded by state budget, create conditions and step up commercialization of research results.

Fifth, strengthen the management capacity of PNB agencies. Renovate the management mode, and improve administration capacity. Review and perfect the organizational structure of each agency, step up the application of advanced information technology and science and technology, and apply international administration standards and norms. Enhance the quality of financial and public asset administration. Promulgate regulations on management of finance and public assets, clearly define the authority and responsibility of each section and individual, especially the heads. Complete the accounting regime, implement audit and supervision, and ensure transparent financial activities of PNB agencies.

Sixth, finalize the financial mechanism. Improve the law on autonomy for PNB agencies of branches and fields in terms of the level of financial autonomy, step up decentralization and increasing PNB agencies’ proactivity. Set up appropriate financial mechanisms to mobilize all social resources for PNB services, especially for healthcare and education, including public-private partnership, joint venture and linkage.

Reform the mechanism of resource division, management and allocation of State budget. The state budget guarantees investment for basic and essential public services and for PNB agencies in remote, isolated and ethnic minority areas. The State budget, instead of supporting PNB agencies, will support directly the poor and entitled beneficiaries when they use basic and essential PNB services; transfer from supporting under the mechanism of average allocation to the mechanism in which the State places orders, and assigns the tasks of PNB service provision based on output quality or bidding for PNB service provision. Allocate capital and assets to PNB agencies; establish PNB agencies’ national financial and asset information system.

Classify PNB agencies by different levels of financial autonomy. The agencies are given stable financial autonomy from 3 to 5 years according to the plan on financial revenue and expenditure approved by competent authorities. Agencies that are fully funded by the State will be subjected to expenditure ceiling. Review tax regulations to encourage financial autonomy and accumulation for investment. Adopt strong mechanisms and policies to create favorable conditions and encourage streamlined payroll and dismiss even those in the state budget payroll.

Seven, improve the effectiveness, and efficiency of state management. Amend and supplement the law on public employees, civil servants, relevant contingent of educationers and legislation. Promote decentralization and assign autonomy to PNB agencies while clearly differentiating the state management and administration of PNB agencies with PNB service provision. Review and complete the plan on developing PNB agencies in line with the socio-economic development plan of the whole country and each locality; change planning by administrative units to planning by branch, sector based on social needs and market demands. Issue economic and technical quota for each type of PNB service, identify criteria for PNB agencies, criteria for evaluating performance results and service quality of PNB agencies by branch or sector, job descriptions for PNB agencies, authority and responsibility of heads of PNB agencies in management and operation, monitoring mechanism and responsibility of the heads. Result of annual apparatus and payroll streamlining is one of the criteria to evaluate performance and ranking of heads of party committees, and PNB agencies.

Intensify coordination between specialized state management agencies and state management agencies in charge of investment and finance at all levels in management of State budget allocation for non-business areas, raising the efficiency of state budget use, and avoid overlapping, and waste.

Eight, strengthen the leadership of the Party, promote the role of the people, the Fatherland Front and socio-political organizations. Party committees and organizations must regularly monitor the organization and operation of PNB agencies. Promulgate regulations on the role and functions of the leadership of party committees and organizations within PNB agencies. Promote the role of the people, the Fatherland Front and socio-political organizations in oversight and critical monitoring of the organization and operation of PNB agencies.


(1) Communist Party of Vietnam, Document of the 12th National Party Congress, Office of the Party Central Committee, Hanoi, 2016, p. 107

(2), (3) Ibid., pp. 276, 277

This article was published in the Communist Review No. 903 (January 2018)

Prof. Vuong Dinh Hue, PhDMember of Politburo, Deputy Prime Minister