While the advantage of an outcomes focus in government is recognised in many reports, too often the reality of how our public bodies operate tends to be in stark contrast, remaining focused on individual outputs. Many agencies are still working on short-term or one year planning and budgeting cycles, and in some cases confusing their outputs with outcomes.
As relatively simple measures of what an organisation has achieved, it is unsurprising outputs can be attractive indicators of success. For example, the outputs from the body responsible for looking after roadworks might include the number of repairs completed, miles of roadway refurbished or newly built, and at what cost, and measures of minimising disruption.
Outcomes can be more complex. This is because rather than looking at what has been achieved, they require an organisation consider whether what they are doing is making a difference and to what. From our previous example, this could include looking to see if traffic flow is now better, journey times are shorter, if there are less accidents, or if it contributed to wider economic development.
Successfully re-orientating our public bodies to an outcomes focus requires leadership from the top. Unfortunately a lack of certainty in government funding has made the long term and even medium term planning required to achieve this outcomes focus increasingly difficult for public bodies. However there are examples within the UK of organisations shifting their focus.
The Scottish Government in its national performance framework, and the Welsh Government in its national strategy, both are now pivoting towards a focus on outcomes. These documents make clear statements of long-term outcomes that set the tone for what public bodies should plan to contribute towards, with a focus on social, economic, environmental and cultural well-being.
On a public body level, there are also examples of an outcomes based approach we can examine. Highways England in its delivery plan for 2015 to 2020 takes such an approach when it took aim to deliver on wider strategic outcomes, such as supporting economic growth.
Such a shift is not a simple task, as once outcomes have been set, in most cases you will find many important factors are not in the control of any one body. This raises a question about how the resources for those interventions are pooled and shared widely enough to ensure, over the longer-term, that the appropriate changes in outcomes are obtained.
This puts forward a strong case not only for cross-government collaboration, but potentially partnerships and collaboration with the wider community and private sectors. For example, improving the well-being of children in a certain area might require an improvement across a range of drivers, from housing standards, to access to pre-school care and education.
Another challenge which arises comes from monitoring our progress towards outcomes. As no one organisation has the full picture, judgements on effectiveness must come from a higher level view. This requires ensuring supporting governance and scrutiny arrangements are moved away from a particular organisation, to become a custodian of the overall plan for outcomes.
It is valid to see what is outlined above as a significant change from the traditional functional, organisation based and mainly short-term budgeting, focus used by many organisations. However, with continued pressure on available resources, and pressure from demographic and economic challenges, we need to look at delivery differently.
Supporting the long-term sustainability of services means stepping outside of traditional silos. As finance professionals, we are well placed to support this with a range of tools and techniques to look at costs and service planning in different ways. And with public bodies over time shifting to this outcomes base approach, these are areas our future expertise will need to be value adding.
This article first appeared in Public Finance Magazine