Innovative Finance & Impact Investing
Assessing the viability of utilising outcomes-based performance instruments for contracting service delivery by government
The South African Government is constantly exploring different ways of fostering cross- sectoral funding collaboratives to address developmental challenges. Outcomes- based Contracting (OBC) is one method under assessment.
National Treasury implemented an Outcomes Based Contract (OBC) pilot project as a follow-up to a previous initiative between itself, the Government of Flanders and the Bertha Centre. Through this initiative the Government of Flanders funded research and development of Outcomes-based instruments through the Technical Management and Support Fund managed by the Office of the Accountant-General in the National Treasury.
The objective of this OBC pilot project was to increase capacity to design and implement OBC instruments in the South African public sector and among civil society organizations, and development partners.
The project commenced in 2017 and was managed by the Government Technical Advisory Centre (GTAC) on behalf of Public Finance in the National Treasury. The broad objective was to test the value and practicality of utilising OBC instruments in the South African public sector.
The project team initially assessed multiple programmes across government for relevance. As the work progressed, the focus turned to testing OBC’s applicability to an early grade literacy project working on promoting reading outcomes in Grades 1 and Grade 2.
Project findings confirmed the feasibility of applying OBC instruments in this scenario, however the instrument was not implemented due to the disruptive effects of the COVID-19 pandemic on the school’s sector.
Nonetheless, government gathered detailed insights on OBCs through this process and there is a possibility that the National Treasury will use the project’s insights to develop specific guidance to facilitate the use of OBCs in public procurement.
The Government of Flanders provided development and outcome funding for the project, and the Bertha Centre provided technical support to GTAC.