Template for an Internal Memorandum by mercy2beans109


									               Results Driven Government: Investing for Outcomes

                    Terms of Reference for the Pathfinder Project

Introduction & Rationale

1.      Commentators on New Zealand’s public management system identify a need to
shift the focus of management towards the achievement of results, as well as delivery
of outputs. While the Public Finance Act requires the Estimates to link outputs to
desired outcomes1, few agencies take an evidential approach linking the interventions
chosen, to outcomes (results) achieved. Substantial scope exists to ‘lift the game’.

2.            The Pathfinder Project (‘Pathfinder’) is a vehicle for collaborating agencies to:

              develop outcome measures, and management tools and frameworks; and
              demonstrate operationally viable ways of improving state sector outcomes.

3.   Pathfinder is a network of eight willing participants2 building outcome
management systems that work for them, and collaborating to share the lessons learnt.

The Pathfinder Project

Objectives and Scope:

4.            Agencies participating in the project will (discussed further below):

     a.         Define, measure and report the outcomes (results) they are funded to deliver;
     b.         Determine how the better nations or states, and/or international benchmarking
                organisations (e.g. OECD, WHO) use outcomes in management systems;
     c.         Focus medium-term and annual planning on improving these outcomes;
     d.         Link their outcome goals or targets, to the outputs required of the agency;
     e.         Develop tools for targeting interventions to maximise results (if appropriate);
     f.         Assess the combined effectiveness of targeting and intervention systems;
     g.         Assess and maximise value-for-money (based on outcomes achieved);
     h.         Integrate outcome reporting and management systems into existing
                management (and, where appropriate, accountability) processes;
     i.         Align operational practices with best practice for delivering outcomes; and
     j.         Work with other agencies, where this is needed to improve outcomes.

5.    Individual agencies are not expected to achieve all of these things during the
course of the project. Given that different agencies are at different stages of managing
for outcomes, each of these objectives should be achieved by at least one agency.
Individual agencies should focus on making a smaller number of real gains, rather than
trying to achieve all of these objectives during the course of the project.

1 Outcomes are defined in the PFA as “the impacts on, or consequences for, the community of the outputs or activities
of Government”.
2 Participants are (in alphabetical order): the Department of Child, Youth and Family; the Department of Conservation;
the Department of Corrections; the Department of Labour; the Inland Revenue Department; the Land Transport Safety
Authority; the Ministry of Health; and the New Zealand Customs Service.

6.    As agencies become more sophisticated users of outcome information, and build
confidence in the accuracy and value of their measures, they may choose to3:

     a.     benchmark outcomes (and costs) between business units and/or nations;
     b.     compare the effectiveness of core interventions in value-for-money terms;
     c.     refine outcome-focussed risk prediction tools & selective targeting concepts;
     d.     consider using outcome-based performance incentives in contracts;
     e.     quantify the optimal level of expenditure on remedial interventions; and
     f.     focus strategic & annual planning on improving outcomes.

7.        Central agency participants will:

     a.     support departments in defining outcome measures that best suit the planning,
            assessment and executive decision-making requirements of the agency;
     b.     provide second opinion advice on outcome measurement and management
            systems, and identify alternate models that could be considered;
     c.     provide co-ordination with other central agency projects;
     d.     assess the extent to which the outcome management and value-for-money
            approaches adopted are transferable to other agencies; and
     e.     review how state sector management practice could be improved by active
            outcome management and reporting, and identify implications for State Sector
            planning, evaluation, reporting, performance contracting and budget process.

8.   Participating agencies will continue to be held accountable for outputs. In the
longer term, it is likely that the emphasis on purchasing outputs will remain, but
agencies will have to produce robust information on outcomes, and provide purchase
and policy advice based on the results achieved. Central agencies will explore the
potential for using outcome information to enhance value-for-money.

Out of Scope:

9.   The Project is a coalition of willing agencies, working collaboratively to define
and measure the outcomes participating agencies want to achieve. It will not:

     a.     Result in additional accountability requirements being selectively applied4;
     b.     Focus on how current outputs are delivered and / or costed;
     c.     Result in any reviews of, or changes to, baselines; or
     d.     Otherwise focus on operational activities (except impact and value for money).


10. A Sponsors’ Group of senior managers will act as a guiding coalition, champion
outcomes-focused management within and beyond their senior management teams,
and provide peer review of agencies’ outcome management practices. A Working
Group, comprised of managers leading the development work within each agency, will
focus on technical issues and record best practice in managing for improved outcomes.

11. Individual agencies retain decision-making rights in their area of responsibility.
Participants remain responsible for discussing outcomes with the appropriate Minister.

3 Based on a study of NZ Government agencies known to be developing advanced outcome management systems.
4 Agencies will, however, be asked to include information on outcomes (state & effectiveness measures) in reports.


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