Embedding an outcomes approach – building capacity within a specific ecosystem

In the first blog of this series, I explained how stakeholders in Abu Dhabi are adopting a ‘whole system approach’ to support public services to be more outcomes-focused. In a follow-up blog (taking the form of a Case Study), I described how Abu Dhabi’s Atmah Social Impact Bond (SIB), launched in April 2020, exemplifies a system-level, as opposed to a project-level, approach which embodied sensitivity to local conditions. I further argued that this system-level approach influenced the design and execution of the SIB in profound ways.

If the Atmah SIB is a microcosm of the Abu Dhabi approach towards outcomes, then in this third blog, I ‘zoom out’ and situate the SIB as part of a wider strategy for embedding outcomes at the centre of how Government aspires to conduct business.

Stewardship

In Abu Dhabi, the stewardship of the overarching social capital development agenda falls on the shoulders of the Department of Community Development (DCD), and affiliates accountable to it for the delivery of specific aspects of this wide-ranging agenda. The DCD works towards three main ambitions:

• A decent standard of living for every member of the community
• A tolerant and inclusive society founded on cohesive families
• An active and responsible community

The DCD Strategy, itself, places clear emphases on the achievement of specific outcomes.

The DCD has commissioned detailed evidence and research to map out the terrain in Abu Dhabi in terms of the players and the key social priorities, benchmarked against a number of international indices and frameworks. This resulted in 20 social challenges identified as priorities by the DCD, which were cascaded down to DCD affiliates and embedded as part of their associated strategies and annual work plans.

Stakeholders in Abu Dhabi have started with distilling clarity around “what are the key problems we need to solve?”, and “Who has a role in tackling these problems?”. They have not started with the pre-supposition that outcomes based contracting (which SIBs are one form of) will be the solution to every problem. Indeed, the DCD places significant emphasis on building and sustaining meaningful cross-sector partnerships.

A shared agenda

Each social challenge prioritised for action in the Emirate is a complex, and often cross-cutting, issue. Improving outcomes is therefore a shared agenda, requiring players to work collaboratively not only across Government entities, but also with the private sector, the social sectors, and with individuals.

An extensive mapping of the local ecosystem was conducted whereby the actual and potential alignment of interests and foci across different Government departments, the DCD and its affiliates, the private sector, and the third sector; were clarified. Using a set of five criteria, this enabled the identification of various constellations of interest that may lend themselves to the formation of cross-sector partnerships to target outcome improvement in different social priorities.

Moving forward, the DCD will encourage partners to explore the feasibility and desirability of leveraging outcomes contracting to improve chances of more tangible impact. It recognises, however, that partners can only engage effective and confidently if they have a proper framework for guiding them to understand how and where different forms of outcomes based contracting may add value.

Building capacity and capability within the system

Ma’an: the Authority of Social Contribution is positioned in the Abu Dhabi ecosystem as the ‘guardian entity’ of outcomes-based contracting, and is setting itself up as a centre for excellence in relation to this. Within the clear parameters set by the DCD, Ma’an is able to play a targeted role in focusing on specific social priorities where capacity building for better impact needs to take place. It plays a visible education and support function across the ecosystem, in helping stakeholders better understand and engage with outcomes-focused approaches, including but not restricted to contracting mechanisms.

It was clear from Ma’an’s experience in developing and implementing the Atmah SIB that Abu Dhabi stakeholders have a wide range of questions, not only around this particular vehicle for achieving social impact, but also other alternatives. Ma’an undertook a ‘listening exercise’ after the launch of the Atmah SIB and collated the feedback to inform its next steps.

This resulted in the production of a resource intended to provide accessible and practical explanations and descriptions, to help different audiences better understand how and when different forms of outcomes-based contracting may be beneficial, and steps which may be taken to engage with these.

This resource recognizes that while contracting and commissioning are not the only vehicles through which social outcomes may be encouraged, these are nonetheless powerful enablers at the disposal of Government and the public sector to stimulate change.

Currently, common contracting practice in Abu Dhabi can be summarised as taking the form of one of the below:

• Cost-reimbursement contracts: These contracts pay the contractors the actual costs they incur in carrying out the works specified in the contracts, plus an additional fee.
• Fee-for-service contracts: This can be considered a sub-set of the above, where services delivered by a contractor are considered separately and are paid for separately.
• Activity-based contracts: This type of contract pays on the basis of the type and volume of services provided.

Traditional forms of contracting are valid and appropriate in many cases, but there are situations where there is a desire to be more intentional about the social outcomes to be achieved, how these are evidenced, and the types of incentives that may be put in place to encourage them.

The resource describes key forms of outcomes focused contracting, such as:

1. Payment by Results
2. Outcomes-based Commissioning (a form of Payment by Results)
3. Social Impact Bond (a form of Outcomes-based Commissioning)

It explains the key conditions that support their enactment, and provides prompts to help audiences determine which may be more appropriate in various contexts, and also illustrates the use of these vehicles in different policy/service areas internationally.

Tailoring to the needs of the local ecosystem

It is of note that some of the guidance produced elsewhere, for example in the United Kingdom by the National Audit Office (for payment by results) and by the Government Outcomes Lab (for SIBs), had to be adapted in order to be relevant to the Abu Dhabi context. For example, Ma’an’s guidance on Social Impact Contracting sets out how such practice may look different in the Abu Dhabi context.

This is exemplified most clearly in the following extract:

“It is highly unlikely that the Abu Dhabi context will have all of the features [that support outcomes based contracting] present in all policy areas of interest to the Government. This does not necessarily mean that it is impossible to use Social Impact Contracting, but stakeholders will need to be aware of the additional challenges this may create. They then need to factor in sufficient time and expertise to manage the design and implementation of a Social Impact Contracting scheme.

For example, there are known policy areas in Abu Dhabi where there is little to no existing data on social outcomes that can help set a performance baseline. In these cases, other methods for agreeing to pay may be required, or stakeholders may choose to have a Social Impact Contract comprising of a smaller proportion of payment that is based on the achievement of results or outcomes in order to reduce risk."

Another area of significant difference, in comparison with the UK and USA contexts for example, is the availability of service providers. Across a number of policy fields, there is a dearth of service providers. In addition, the social sector in Abu Dhabi is still nascent, albeit with interesting growth trajectories. There are ambitions by Ma’an and other stakeholders in Abu Dhabi to use various levers available to Government to stimulate the growth of the social sector. Hence, there are specific considerations around the implications for various types of outcomes-based contracting so that the conditions for the emergence of a diverse and thriving social sector may be created.

Ma’an has therefore widened the scope of the resource to draw attention to other mechanisms for encouraging social impact, including raising awareness of new innovations such as the Social Impact Guarantee and Performance-Based Grants. Users of the resource are encouraged to consider the appropriateness of different mechanisms by building on their assessment of the strengths and weaknesses of the local ecosystem. As Her Excellency Salama Al Ameemi, Director General of Ma’an, expressed: “At Ma’an, we are always looking at ways of how we can deliver better pioneering programmes that create social impact. We are taking the time and effort to explore different approaches when it comes to Social Impact Bonds and other forms of Social Impact Contracting. We are keen that innovations meet the needs of Abu Dhabi, and help drive measurable and lasting change for years to come.”

Conclusion

Taking a systems-level approach towards embedding outcomes foci requires players to think and work differently. The journey of Abu Dhabi stakeholders exemplifies the importance of putting in place building blocks that enable different players to be clear about strategic priorities, to be clear about the constellations of interests and partners around these, to know how to come together in partnership, and to understand the levers that encourage specific outcomes focus.

While there is much to be learned from the international experience in this rapidly growing space, it is also vital that we do not simply try to replicate existing models, including those that may be effective elsewhere. Instead, careful translation and adaptation is required. The Social Impact Contracting guidance, for example, anchors the practice of contracting for outcomes tangibly to the make-up of the Abu Dhabi ecosystem. It builds on a clear sense of strategic priorities as well as on the existing strengths within the ecosystem, while having a longer term approach towards plugging some of the gaps. For example, in identifying the barriers to scale, stakeholders in Abu Dhabi are currently exploring the potential of Outcomes Funds to reduce transaction costs in designing and implementing outcomes-focused projects. At the same time, they are keen that the design and execution of any Outcomes Fund need to be appropriate to the local context.