Public institutions should demonstrate what benefits additional budget funding will deliver to citizens. Investors’ Forum, an association representing leading businesses in Lithuania, proposes that institutions requesting additional funding without demonstrating its benefits should have their 2027 budget allocations reduced by 5% compared with 2026. Funding for statutory benefits would be exempt from this measure.

“Currently, budget negotiations tend to focus on how much additional funding is needed. But the key question is: what will the people of Lithuania get in return? When businesses invest an additional euro, they assess the return on that investment. The state should follow the same logic: institutions delivering better results should have the opportunity to receive more funding. If the additional benefits cannot be demonstrated, funding should not increase automatically,” says Rolandas Valiūnas, Chairman of the Board of Investors’ Forum.

What matters most is the value delivered by every euro

Budget negotiations currently rely largely on previous years’ expenditure and incremental increases. Investors propose that any institution requesting additional funding should provide a one-page justification outlining up to three of its most significant achievements, explaining what it would accomplish with additional resources and what outcomes would be lost if its funding were reduced. The assessment would consider the volume and quality of services delivered, as well as the cost per outcome.

The impact of public sector activities can already be measured. For example, the State Labour Inspectorate tracks how many people enter legal employment following its inspections. Furthermore, in 2025, 83.7% of court judgments in cases referred from the Inspectorate’s Labour Disputes Commissions were substantially consistent with the commissions’ decisions. Such indicators make it possible to assess the impact on budget revenue and the potential to reduce the courts’ workload.

Institutions should be rewarded for saving money

The association proposes eliminating the incentive for institutions to spend all remaining funds at the end of the year simply out of concern that their budgets will otherwise be reduced the following year. If an institution achieves its agreed targets, any savings should not automatically lead to a reduction in its funding for the next year. The association also proposes making institutions’ funding justifications and their assessments publicly available.

The proposal comes as Lithuania considers its 2027 budget, which projects a general government deficit of 3.8% of GDP. According to the National Audit Office of Lithuania, the deficit could reach 5% of GDP, while interest payments on public debt are expected to amount to approximately €1.4 billion next year. Investors believe this provides another reason to link every additional euro of public spending to measurable outcomes.

Sustainable public finances directly affect the investment climate

The stability of tax rules, government borrowing costs and financing conditions for businesses are directly linked to the sustainability of public finances. When public spending increases without an assessment of its impact, the need for additional borrowing or new taxes grows. Businesses also rely on public services every day, from obtaining permits to tax administration. The quality and efficiency of public institutions therefore directly influence Lithuania’s attractiveness as an investment destination.

Investors’ Forum calls on the Budget and Finance Committee of the Seimas to hold public hearings with the heads of institutions requesting increased funding during the deliberations on the 2027 budget. The association also proposes that the Ministry of Finance incorporate this impact-based assessment principle into the preparation of the 2028–2030 budget.

About Investors’ Forum

Investors’ Forum brings together major foreign and Lithuanian investors operating across various sectors of the Lithuanian economy. The association represents more than 90 large, reputable companies, including Thermo Fisher, Northway, Tesonet, Telia, Swedbank, SEB, Luminor, IKI, Rimi, Lidl, SBA, Omnisend, Hostinger and others.

Its members are committed to creating the best possible investment climate in Lithuania by fostering trust in business and government, building an efficient public sector, and strengthening the system for developing and attracting talent. These are the foundations of a safe and prosperous Lithuania.