1. Output Based Budgeting Change of culture for better public service delivery Syed Asad Ali Shah Managing partner Deloitte Yousuf Adil Chartered Accountants May 02, 2016

2. 1. Need for output based budgeting (OBB) 2.OBB for better service delivery and enhanced outcomes 3.Global Experience of OBB 4.Case Study: OBB implementation in New Zealand 5.Implementation of OBB in Pakistan 6.Recommendations for better implementation of OBB 7.Gov: 2020 New Era of Service Delivery Contents 2 | Output Based Budgeting

3. 1. Need for Output Based Budgeting 9 | Output Based Budgeting

4. Government budgeting is the allocation and use of resources, and associated decisions about how the resources used will be acquired, and how they will be used. Budgeting is a process involving four stages: Aggregate fiscal policy formulation: Determination of the government’s overarching objectives for the budget deficit, debt and other relevant fiscal aggregates. Budget preparation and enactment: The government decides how much funding it will provide, to which agencies, and for which purposes. This is given formal expression in the budget law and budget regulations, which are approved by the legislature. Budget execution: Carrying out of the expenditure plan developed in the budget – including the entering of contracts and expenditure of funds. Accounting, Auditing and Reporting: Preparation of accounting records of government’s spending and revenue, their auditing by both internal and external auditors, and the provision of reports on budget execution to government agencies, ministers, parliament and the public. Normal Budgeting Framework 4 | Output Based Budgeting

5. Sound macro ‐ fiscal outcomes: Budget is a product of aggregate fiscal policy. Aggregate fiscal policy needs to ensure “fiscal sustainability”, which means essentially that deficits and debt do not get out of control. Appropriate prioritization of expenditure: Allocation of funds to the sectors and programs which are most effective in meeting social needs i.e. if a country is facing major health challenges, additional funds will be allocated in the budget for programs designed to support the health sector. Funds are moved away from sectors and programs where spending is low priority. Service effectiveness and efficiency: Government services are delivered efficiently and, that they are designed and managed so as to maximize their effectiveness and outcomes for the citizens needs and expectations. Key Objectives of Budgeting 5 | Output Based Budgeting

6. Pitfalls of Traditional Budgeting  Focus on one year. Pursuing short term interests, lacks strategic focus.  Characterized by an input orientation and a line item structure.  Resources are allocated on the basis of the amount of money to spend on each cost category e.g. materials, labour, overhead etc.  Performance is measured by focusing on the inputs, and expressed in monetary terms, without analyzing the results achieved with those inputs. Resultantly, traditional budgeting is neither efficient nor responsive to citizens’ needs and expectations. There is a need to rationalise government expenditure and improve public sector services delivery and quality of results by making it transparent and based on outcomes that can be seen by the citizens. 6 | Output Based Budgeting

7. Traditional Budget Budgeting Estimate of Resources Allocation of Resources Department Budget Spending ExpenditureOutputImpact Accountability AccountingEvaluationAudit Public Financial Management 7 | Output Based Budgeting

8. Output Based Budgeting Also referred to as Outcome based or Performance based budgeting. OBB is a process by which government agencies are funded on the basis of delivery of outputs. Based on the assumption that presenting performance information alongside budget amounts will improve budget decision-making by focusing funding choices on program results May 02, 2016Public Financial Management8

9. Output Based Budget – Change of Culture OutputResultsImpactsEvaluationAudit Decision Policy Allocation Resources (Input) Public Financial Management 8 | Output Based Budgeting

10. 2. OBB for better service delivery and improved outcomes 9 | Output Based Budgeting

11. Output based budgeting aims to improve the effectiveness and efficiency of public expenditure by linking the funding of public sector organizations to the results they deliver. It uses systematic performance information i.e. indicators, evaluations, program costings etc. to make this link. Effectiveness refers to the extent to which a service delivers the benefits which it is supposed to deliver to society. For example, an HIV/AIDS prevention campaign is effective if it succeeds in reducing the rate of new HIV/AIDS infections. Effectiveness is also about the extent to which programs achieve their intended outcomes. Efficiency refers to delivery of services at the lowest possible cost and within the stipulated / minimum time. The OBB difference 10 | Output Based Budgeting

12. May 02, 2016Public Financial Management12 Planning for Outcome Budgeting for Outcome Monitoring & Evaluation Results Reporting Developing the strategic Results Framework for the Ministry Preparing the resource requirements to drive the ministry results Managing information for monitoring, evaluation and decision support system Performance reporting and policy formulation OBB Strategic Cycle

13. May 02, 2016Public Financial Management13 SIX LEVERS Vertical alignment of national priorities and ministry activities Managing cross cutting initiatives Coordination of operating and development budgets Accountability in the public sector and authority over resources Systematic monitoring and evaluation system Focus on outcomes  Six transformation levers for implementation of OBB:

14. Focus on outputs The main focus in OBB system is the creation of links between the quantity of output i.e. volume & quality of services provided, and the level of funding. Every ministry/ agency needs to explicitly define the outcomes that its services (outputs) aim to deliver to the citizens; and prepare key performance indicators to measure the effectiveness and efficiency of its services. Performance information should be simple, affordable, and usable. Realism and the recognition of financial and human resource constraints suggest that countries should aim initially to develop only a few of key performance indicators for each ministry and subsequently for each program. By clarifying roles and expectations, establishing management frameworks and standardizing reporting processes, departments can better align program spending and demonstrate tangible value. Outputs need to be measurable, reliable, relevant and comparable. They have consequences for rewards and punishments.. 12 | Output Based Budgeting

15. Vertical Alignment of National Priorities Vertical co-operation is essential between ministries at national and sub- national level to deliver on national priorities. 13 | Output Based Budgeting

16. Cross-cutting issues are commonly defined as topics which, by their very nature, have a strong impact on all operations in a given field. OBB improves understanding of crosscutting programs in government and facilitates that topics defined as cross-cutting issues e.g. gender, environmental protection and the struggle against epidemic diseases etc., are considered and addressed effectively and efficiently. To eliminate wastage of funds, cross-cutting issues are addressed through identification of overlapping programs/activities and shared outcomes. Managing Cross Cutting Initiatives Managing cross cutting initiatives Wastage of funds is eliminated by addressing cross- cutting issues through overlapping programmes. 14 | Output Based Budgeting

17. Coordination of Operating and Development Budgets Coordination of operating and development budgets Operating budget relates to non-development or recurring expenditure of the department e.g. salaries and travelling cost. Development budget is related to special projects and activities planned in the budget e.g. construction of schools. It is desirable not to have separation between operating and development expenditure, because it may hinder budgetary implications on operating expenditure from development expenditure programs. It is desirable to integrate consideration of operating and development expenditures. Such an integration could focus in a comprehensive way on aspects such as the structure of appropriation, the presentation of data in the budget documentation and corporate planning procedures. It is important to bring together in one place, the information about fiscal implications of operating and development spendings. 15 | Output Based Budgeting

18. Accountability and Authority Over Resources Accountability in the public sector and authority over resources The output based budgeting ideally requires greater flexibility for spending ministries and program managers, who are expected to become more accountable for results. Output based budgeting is a proven means of increasing financial transparency and accountability in the public sector. Accountability on performance under OBB can significantly improve by introduction of accrual-based budgeting and accounting. Accountability is a paramount virtue in governance. 16 | Output Based Budgeting

19. Systematic Monitoring and Evaluation System Systematic monitoring and evaluation system The systematic monitoring and evaluation of performance indicator refers to the mechanisms for data collection, processing of data into indicators, validation of those indicators i.e. ensuring that the numbers are reliable and are not either manipulated or statistically questionable, and presentation to users. Impact evaluations may require more complex methods and might be contracted out. There are two aspects of indicator validation. The first concerns the validation of the capacity of agency systems to ensure indicator quality. The other aspect of indicator validation is the audit of indicators. Performance based budgeting cannot function until a system of performance measurement has been instituted. 17 | Output Based Budgeting

20. Vertical and Horizontal Integration Vertical Integration Horizontal Integration Vertical and horizontal Integration ensure synergetic approach collective drive to achieve national objectives. The ministries’ activities are aligned with Ministries’ Programmes. The ministries’ programmes are aligned with National Programmes and the National Programmes are aligned with the Integrated National Plan. The Provincial Departments’ activities are aligned with Provincial Departments’ Programmes. The Provincial Departments’ Programmes are aligned with Provincial Programmes and the Provincial Programmes are aligned with the Integrated Provincial Plan. This vertical and horizontal integration, through alignment of Provincial Programmes with National Programmes and alignment of Integrated Provincial Plans with Integrated National Plan, ensures the synergetic approach and collective drive to achieve National Objectives. 18 | Output Based Budgeting

21. 3. Global Experience of OBB 19 | Output Based Budgeting

22. Implementation Approaches There is no single approach and model of output based budgeting. The countries need to adopt their approach to the relevant political and institutional context. Different implantation strategies, timescale and coverage are as follows: Implementation Strategy Top-down: Top-down is more centralized approach to implementing reforms. In this approach the central government agency play the primary role in developing implementing or monitoring the reforms. The approach intends to be more systematic, with central agencies imposing standards and rules generally applicable to all agencies. Bottom-up: With bottom-up approach the individual agencies are the key actors in the reforms, their participation can be voluntary, and have freedom to develop their own methods and approaches. In summary, this is less enforcement from the top. 22 | Output Based Budgeting

23. Implementation Approaches (Contd..) Timescale Big bang: Countries have adopted different timeframes and timescales for implementing these initiatives. Bing bang approach means introducing number of sweeping reforms at the same time without a long lead for implementation. Incremental: Incremental approach in which change is introduced on step by step basis. Coverage Comprehensive: Top down approach usually results in comprehensive coverage backed by legislation. Partial: Partial implementation is a result of decentralized OBB system. 23| Output Based Budgeting

24. Implementation of OBB in different countries The 1990 witnessed resurgence of efforts by the governments of OECD ( Organization for Economic Co-operation and Development – 30 countries) countries to introduce performance information into their budget processes. The central aim of this reform is to improve decision making by providing better quality and more concrete information on the performance of agencies and programs. Below is the summary of implementation of performance indicators in different countries: Countries StrategiesCoverageTimescale Top-downBottom-upComprehensivePartialBig bangIncremental AustraliaXXX CanadaXXX DenmarkXXX NetherlandXXX SwedenXXX United KingdomXXX United StatesXXX 24 | Output Based Budgeting

25. Case Study – New Zealand Evolution of OBB In the early 1980s, New Zealand’s economy was shattered by rising debt, high unemployment, interest rates and inflation. This brought the country to near- bankruptcy, a fact reflected in the country’s slide from the top to the bottom percentile in Organization for Economic Cooperation and Development (OECD) rankings. In national elections in 1984 the ruling Conservative Party was replaced by a cadre of young, ambitious Labour Party members who were determined to make good on promises of a sweeping economic overhaul. New Zealand passed three major pieces of legislation in the late 1980s. – The State Sector Act; – the State Owned Enterprises Act; and – the Public Finance Act. 25 | Output Based Budgeting

26. Case Study – New Zealand The Reform Structure  Govt instituted a new performance management framework. While ministers used to present budgets containing a list of planned expenditures, or inputs, they now had to specify what actions, or outputs, they could achieve. Ministers also had to show how their outputs and appropriations tied to outcomes agreed upon by the Cabinet and ministers at the beginning of the fiscal year. An evaluation framework, consisting of metrics and reporting requirements was instituted to gauge progress against those targets on a ministry-by-ministry basis.  As part of reform agenda, New Zealand switched from cash-based accounting and adopted accrual-based accounting which allowed the country to better match income with expenditures (and also outputs) on both a national and a project level.  A new accountability framework was introduced which clarified roles, responsibilities and reporting obligations. Each ministry was empowered to hire and manage its own staff and budget. Authority was given to permanent secretaries, or chief executives as they are now called, broad authority to govern staffing, salaries and purchasing, and placing them on fixed-term contracts. 26 | Output Based Budgeting

27. Case Study – New Zealand OBB system’s Outlines  The new financial management structure holds each department accountable for its fiscal decisions, from the ministerial level on down.  Departments submit a Statement of Intent (a three-to-five-year business plan), which is also signed by the responsible minister.  The performance targets for each year are set out in the budget estimates documents.  The department’s Annual Report, a public accountability document subject to independent audit, includes a Statement of Service Performance, which sets out its achievements in relation to the performance targets.  The Annual Report is signed by the chief executive and is tabled in Parliament. In addition, chief executives agree on priorities and targets with their respective ministers at the start of each year.  This agreement is documented in an Output Plan, against which performance is reviewed three or four times per year.  The Treasury prepares a Fiscal Strategy Report detailing the long-term fiscal policy impacts, economic forecasts and other data for the government as a whole, and these are signed by the Minister of Finance. 27 | Output Based Budgeting

28. Case Study – New Zealand Sustaining the Commitment  New Zealand’s path to reform was not without challenges. However, Implementation Team managed to sustain the effort, working on an administrative level to push through reforms department by department.  New Zealand’s ability to stomach the messiness and uncertainty that comes with change, has resulted in significant success. Results  New Zealand brought its inflation rates down to the low single digits.  During the 1990s, New Zealand enjoyed faster economic growth than either Germany or Japan, an outcome that few could have imagined at the start.  National debt also improved, falling from 50 percent of GDP during the peak of the reform process to just above 10 percent in 2008.  New Zealand is ranked among the top four nations in a comparison of government debt, ahead of most other developed countries. 28 | Output Based Budgeting

29. 4. Implementation of OBB in Pakistan 29 | Output Based Budgeting

30. Implementation of OBB by Federal Government Federal Government started implementing the Medium Term Budgetary Reform (MTBF) during 2003 with support from the UK Department for International Development (DFID), who continued the support until 2012. Since then, the initiative is being strengthened in collaboration with the European Union. The main features of MTBF are as follows:  Ministries make their plans and prepare budgetary estimates for a rolling 3 year budgetary horizon. This includes current year’s estimates, which are to be appropriated by Parliament, and two additional or “outer” years estimates.  Ministry’s budget is broken down by “Outputs”. This enables Parliament and other stakeholders to assess whether value for money in terms of delivery of services is being achieved.  Linkage is established between current and development budget for service delivery with total budgetary allocations for each Ministry / Division.  Key Performance indicators are developed for measuring the quantity and quality of services (outputs) to be delivered.  Outcomes are identified that represent effects of service delivery on the target population. 30 | Output Based Budgeting

31. Implementation of OBB by Provincial Governments Khyber Pakhtunk hwa (KP)  Govt of KP adopted a comprehensive fiscal reform program in 2001 ‐ 02 based on four pillars. One of the pillar was output ‐ based accountability mechanism.  The Output Based Budgeting system was initially piloted in three departments during 2010 ‐ 11 with its rollout to nine more departments during 2011 ‐ 12.  During the year 2011 ‐ 12, the OBB was extended to district level with the introduction of conditional grants initially from DFID.  The OBB has strengthened to bring together financial and non- financial information and to create linkage of budget spending with departmental outcomes, outputs targets, and indicators which in turn enhances service delivery.  OBB for 2014-17 has been developed for all departments which depicts sufficient performance information for the rigorous monitoring and evaluation. 31 | Output Based Budgeting

32. Implementation of OBB by Provincial Governments Punjab The Government of Punjab has Pilot Tested the OBB in the two departments i.e. Department of Health and Department of Irrigation and Power during FY2010 – FY2012.  Output-based budgets for both departments, to the spending unit level, have been developed for another five departments. Sindh The Govt of Sindh has included OBB initiative in its five years’ PFM Reform Strategy (2014-15 to 2019-20). The strategy includes measures to:  Strengthen the capacity of the MTBF Cell in the finance department to coordinate and liaison with the line departments to support them in preparation and implementation of OBB/MTBF.  Assist line departments to prepare credible medium-term operational plans, on the basis of which, outputs and outcomes are identified.  Provide technical assistance to line departments to prepare OBB plans for their sectors. BalochistanThe Govt of Balochistan is yet to take tangible steps for implementation of OBB. 30 | Output Based Budgeting

33. Case Study – Khyber Pakhtunkhwa OBB Pilot Phase – Design and Structure Departments and Districts GoKP introduced the OBB through Pilot phase in 2011-12. The Pilot Phase involved two departments, Health and Elementary & Secondary Education (E&SE) Depts in two districts i.e. Dera Ismail Khan and Buner. Financial and Technical Support DFID extended financial and technical support for the implementation of the Pilot Phase. The technical support was extended by through DFID’s Sub-National Governance Programme for GoKP. District Plans Department wise comprehensive District Strategic Plans were prepared for each district. The district plans included problem analysis, objectives, strategy, KPIs, outputs and budget estimates. Implementation Roles The implementation was carried out by respective department. Finance department had the role for coordination with donor, audit and third party validation. Roles of officials of each department at provincial, district and implementing agency level were defined. Involvement of community was ensured through Parent Teacher Councils. 31 | Output Based Budgeting

34. Continuous Audit Deloitte Pakistan was engaged to conduct the continuous audit of the Programme. Continuous audit has hybrid nature of monitoring & evaluation and conventional post audit. The audit teams were in the field right from the first day and audit covered everything from planning/ identification of needs to beneficiary interviews. Engineering firm was associated to validate the construction. Third Party Validation Grant Thornton was engaged to conduct the Third Party Validation of the Programme to confirm the impact of outputs. Results  Better identification of needs and priorities.  Value for money in expenditure.  Rewards for better performance – savings were re-allocated to schools for furniture etc.  Involvement and ownership of community.  Beginning of the change in culture – orientation towards results.  Identification of potential issues for roll-out of OBB. 34 | Output Based Budgeting Case Study – Khyber Pakhtunkhwa

35. OutcomesOutputs 1. Improved governance and sustained policy commitment 1.1 Education sector better managed a) Integrated and participative sector development planning b) Improved performance monitoring of schools c) Effectiveness & fully operational PTCs 2. Universal Primary Education2.1. Better supported and more effective primary schools 2.2. Improved enrolment and quality at primary level education 2.3. Primary school students supported while minimizing social and gender disparity Extracts from District Strategic Plan, E&SE Department, District DI Khan 33 | Output Based Budgeting Case Study – Khyber Pakhtunkhwa

36. BaselinesOutputTargetsMeans of verification Girl’s schools (only Primary) in D.I Khan not meeting minimum standards of infrastructure. All missing facilities provided and operational in each of the targeted schools 40% of baselines schools District EMIS reports All Girls schools (only Primary) in D.I Khan with classroom to student ratio over 1:40 Additional Classrooms built in the schools 40% of baseline schools constructed additional classrooms Internal progress reports, audit reports and third party validation report. Number of girls enrolled in primary, middle, high, higher secondary schools. Increased enrolments10% increase in enrolments over baseline EMIS reports Class-wise girls dropout ratesDecrease in dropout rate at with regard to the base period Reduction in girls dropout by 1% annually EMIS reports Extracts from District Strategic Plan, E&SE Department, District DI Khan 34 | Output Based Budgeting

37. Case Study – Khyber Pakhtunkhwa DistrictsINDICATORBASE LINETARGETAchievement DI KHANDecrease in number of girls primary schools with missing facility 398 girls schools in D I Khan have missing facilities. 20% reduction in schools with missing facilities. 80 schools will be provided with additional facilities benefiting 7,638 girl children. 155 schools selected. Benefiting approximately 14,000 girls enrolled in those schools. BUNERDecrease in number of girls primary schools with missing facility 156 girls schools in Buner have missing facilities. 20% reduction in schools with missing facilities. 31 schools will be provided with additional facilities benefiting 7400 girl children. 86 schools selected. Benefiting approximately 20,640 girls enrolled in these schools. Extracts from Budget White Paper 2012-13 issued by Finance Department, GoKP 35 | Output Based Budgeting

38. Case Study – Khyber Pakhtunkhwa OUTPUTKPITARGETPROGRESSMedium Term Targets 2013-14 2014-152015-162016-17 6. Better supported and more effective schools Additional classrooms, labs, examination halls 1,140 facilities 800 facilities1,000 facilities 1,200 facilities 1,500 facilities Mosques to Primary School 25 masjids30 masjids 40 masjids30 masjids 9. Provision of education to all through minimizing social and gender disparity Students provided with free text books 5.2 M students 5.42M students 5.69M students 5.97M students 6.27M students Extracts from Output Based Budget: Budget Estimates for Service Delivery 2014-17 issued by Finance Department, GoKP 36 | Output Based Budgeting

39. 5. Recommendations for better implementation of OBB 37 | Output Based Budgeting

40. Recommendations for Better Implementation of OBB  Pakistan is using top-down incremental approach to implement the OBB. This implementation approach is suitable, however, it is recommended that clear timelines should be defined in Vision 2025 document to achieve the full implantation, preferably by 2020.  Planning Commission and finance department should provide leadership for full implantation of OBB through consistent policies and commitment over the years.  Respective Secretary and Minister should agree and sign the three years’ business plan of the ministry/ department which should be broken down in annual targets/ outputs. Annual Report should be prepared and signed by respective Secretary and Minister to present the progress against approved business plan.  Shift from cash-based to accrual accounting is highly recommended. It can be challenging, however, it shall provide greater cash flow visibility and shall help government to track the real income and expenses, more effectively. 38 | Output Based Budgeting

41. Recommendations for Better Implementation of OBB  Focused efforts are required to embed Independent Monitoring and Evaluation into OBB system. Continuous third party audit in KP is a good example to ensure effective monitoring and evaluation of OBB.  The Audit function is not aligned with OBB system. The current audit focus is expenditure verification while authentication of outputs is completely ignored. Validation of outputs should be made as an integral part of the audit of public expenditure.  Investment should be made in technology, training and capacity building at all levels for effective and efficient implantation of the OBB.  New Zealand model of OBB should be adopted to enhance transparency, efficiency and effectiveness of spending, enhanced output and outcomes. 39 | Output Based Budgeting

42. 5. New Era of Public Service Delivery 40 | Output Based Budgeting

43. Gov2020 : A Journey into the Future of Government  Gov2020 is Deloitte’s endeavor which comprises research and expertise from across the globe to start a discussion on what is probable, and even more importantly, what is possible for those who are most willing to embrace change.  Gov2020 is for govts wishing to engage with the future. It provides policy makers with some provocative ideas about what is possible and a catalyst to evaluate whether they are ready to embrace a future that should be very different from today. Effectively responding to the drivers of change and shifting needs of citizens will challenge virtually every process, system and structure of government.  The confluence of several factors e.g. demographic, socio-economic, and technological, will influence what happens in the future and ultimately, how govts evolve to meet citizens’ changing needs. Understanding these factors or ‘drivers of change’ and their potential impact is the first step in preparing for the future.  This research project draws from hundreds of interviews conducted by dozens of colleagues over a multi-year period with leading experts from around the world. The research highlights that across the world, trust in government is at an all-time low, citizen expectations are rising, and government finances are under stress. The project has presented seven major trends that have potential to reshape government and transform the public sector. 41 | Output Based Budgeting

44. Government – 2020 : Mega Shifts  Government as an enabler instead of a solution provider In 2020, the most successful govts focus on developing societal solutions from outside government, rather than on trying to solve problems themselves. They build platforms, hold partners accountable for targeted outcomes, open up services to choice, and manage crowdsourced campaigns and competitions. Result: a big increase in public-private partnerships. This in turn encourages the growth of triple-bottom line businesses that pursue social and environmental goals along with financial ones.  Made-for-me service delivery Between now and 2020, scores of public service interactions in Western governments will be personalized and available from home and mobile devices. Many government services continue to go mobile, moving out to neighborhoods (perhaps on “taco truck” style vehicles) and deliver in-person services to constituents. Why? Because large centralized offices don’t make sense when different groups of people have different needs, or when many traditional functions can be handled remotely through digital services.  Distributed governance Increasingly, “government” functions are being “co-created” with citizens, on their own or working with others. Technology makes it possible to distribute tasks to citizens. For example, Hawaii’s tsunami siren app coordinates citizen volunteers who adopt a warning siren and take responsibility to ensure it has functioning batteries. Wikipedia-like sites could highlight problems - and solutions - about which citizens care most deeply. 44 | Output Based Budgeting

45. Government – 2020 : Mega Shifts  Data-smart government Predictive modeling and other types of data analysis allow the public sector to focus more on prevention, instead of just reaction and remediation. For example, electric or water bills that graphically show usage stats can significantly reduce household waste. Analytics give policymakers the ability to test potential solutions in advance. These tests won’t be perfect, but they represent a more fine-tuned approach to predict, say, whether a policy that worked for one segment of society will work for another.  Alternative forms of government funding We already see increased use of payment-for-results models, such as social impact bonds and tax increment financing (TIF) to finance costly development projects and services. In essence, these initiatives flip the old models and move some financial risks from governments to investors and contractors. Dynamic pricing and pay-as-you-go systems will replace the blunt pricing models of the past. With greater frequency, governments will allow citizens to pay in real time for the services they use. To ensure the right balance between supply and demand for infrastructure services, governments will employ multiple forms of dynamic pricing for road use and parking. In simple terms, social costs and benefits, get better reflected in the price. 43 | Output Based Budgeting

46. Government – 2020 : Mega Shifts  Just-in-time civil service Radical changes in the public sector’s talent model are possible. Governments will also expand their talent networks to include “partnership talent” (employees who are part of joint ventures), “borrowed talent” (employees of contractors), “freelance talent” (independent, individual contractors) and “open-source talent” (people who don’t work for government at all, but are part of a value chain of services). This shift from a closed model to an open, more inclusive one will redefine what “public workforce” actually means. Advanced HR policies will track skills, accomplishments, and certifications in ways that keep employees engaged.  A new basis for national prosperity Critics have long criticized both GDP and GNP metrics for failing to measure social success. Society has evolving attitudes about what defines success, and new methods will measure social good. They will include more holistic measures of progress and well-being such as personal safety, ecosystem sustainability, health and wellness, shelter, sanitation, inclusion and personal freedom. Taken together, they will change how societies assess their progress; placing new demands of government and business. 44 | Output Based Budgeting

47. Let’s Change for better public service delivery Thank You.