While many reports recognise the advantage of an outcomes focus in government, too often our public bodies concentrate 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 that outputs can be attractive indicators of success. For example, the outputs from the body that looks after roadworks might include the number of repairs completed, miles of roadway refurbished or newly built, and at what cost.
Outcomes can be more complex. They require an organisation to consider whether what it is doing is making a difference and to what. From our previous example, this could include looking to see whether traffic flow is better, journey times shorter, if there are fewer accidents, or if the works contributed to wider economic development.
Successfully re-orientating our public bodies to an outcomes focus requires leadership from the top.
Unfortunately, lack of certainty in government funding has made the long-term and even medium-term planning required to achieve this outcomes focus increasingly difficult. 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, are both 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 wellbeing.
Within individual public bodies, there are also examples of outcomes-based approaches. Highways England in its delivery plan for 2015-20, for instance, aims to deliver on wider strategic outcomes, such as supporting economic growth.
Such a shift is not a simple task – once outcomes have been set, you will frequently find that important factors are not under the control of any single body. This raises questions about how the resources for those interventions are pooled and shared widely enough to ensure that 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 sector. For example, improving the wellbeing of children in a certain area might require an improvement across a range of areas – from housing standards to access to pre-school care and education.
Another challenge comes with monitoring our progress. If no one organisation has the full picture, judgements on effectiveness must come from a higher level. So governance and scrutiny arrangements must be moved away from a particular organisation to a custodian of the overall plan for outcomes.
This is 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, we need to look at delivery differently.
As finance professionals, we are well placed to offer a range of tools to look at costs and service planning in different ways. In future, we must support the long-term sustainability of services by helping public bodies to step outside traditional silos.
