This article was prepared on the basis of the proposals of its author, included in the report of the expert group, set up under the instruction of the President of the Russian Federation dated 12 February 2013 to identify measures of the efficiency improving of the budget spending. The author's proposals address two tasks of improving the organizational and financial mechanisms for public and municipal services: 1) the implementation of the public sector and local government agencies reform; 2) the creation of an "open" area of public and municipal services. Openness is understood in the sense that in this area state and local government agencies, as well as private, primarily non-profit organizations are functioning in competition with each other.

The proposed measures are aimed at the adjustment of existing normative legal acts, as well as developing new ones. They are divided into short-term (implementation until 2016) and medium term (implementation in 2017, 2018).

Analysis of the progress of the reform of institutions leads to a conclusion that today, much of it has deviated from its original purpose and is on the verge of collapse on a number of its key parameters. In this context, there are proposed measures related to: a significant increase of economic self-reliance of autonomous and budget funded institutions in the areas of planning, accounting, money management, and the transition to normative financing of the provision of the public and municipal services, ensuring greater structure conformity, content and quality of these services to the guarantees and obligations of the state, the priorities of socio-economic policy.

The second task deals with the problems and measures aimed at: improving the legal regulation of the provision of public and municipal services (today in the definition of such services there is already a discrimination against private organizations as their potential suppliers); implementation of an institutional conversion of public and local government agencies (it is proposed to begin to work on the development of nonprofit organizations on the basis of state and municipal property that may be jointly established by federal and regional authorities, local authorities, as well as individuals); improvement of the mechanisms of the budget financing of public and municipal services (also it is proposed to establish a common legal framework for the provision of state and municipal grants by adopting a special federal law).