Performance Contracts and Newfoundland and Labradors Regional Economic Development Boards: Initial F

1
Performance Contracts and Newfoundland and
Labradors Regional Economic Development Boards
Initial Framework and Lessons Learned

• Rob Greenwood, Ph.D.
• Director, Leslie Harris Centre of Regional Policy
  and Development, Memorial University
• March 15, 2005

2
NLs Economic Zones Organizing for Regional
Development

• 1980s Regional Development Alphabet Soup
• 58 Rural Development Associations (fed-prov
  support)
• 17 Community Futures Committees (fed support)
• 15 Business Development Centres (fed support)
• no formal Municipal role
• creatures of the province
• economic development officers
• local development corporations
• Little coordination lots of competition
  confused mandates
• Poor use of core administration funds
• Federal Provincial Government Departments
  Agencies as bad

3
NLs Economic Zones

• Timeline
• April 1992 NLFM-NLRDC Executives meet for first
  time
• June 1992 Provincial Strategic Economic Plan
• 17 economic zones
• June 1993 NLFM-NLRDC Conference Learning From
  Ourselves The Beginning
• Sept. 1993 NLRDC requests non-partisan
  commission
• March 1994
• Fed-Prov funding to RDAs/NLRDC set to expire
• Task Force on Community Economic Development
  Established
• January 1995 Task Force Report, Community
  Matters The New Regional Economic Development
  Released
• February 1995 Fed Prov Govts Announce Support
  for Task Force Recommendations

4
NLs Economic Zones

• Regional Economic Development Boards (REDBs)
• 20 economic zones
• business, labour, municipalities, community
  development groups, education training, other
• gender equity
• not appointed

5
NLs Economic Zones

• Regional Economic Development Boards (REDBs)
• 5 core functions
• Provide leadership in the development and
  implementation of a regional strategic economic
  plan
• Coordinate business development support (change
  from Task Force)
• Support organizations and communities within
  their zone
• Coordinate social and economic initiatives
• Promote public participation and community
  education in regional development

6
Partnership Approach to Regional Economic
Development

• Federal Departments
• And Agencies
• Regional/Rural
• Development Groups
• ACOA
• coordination of
• federal support
• Municipalities Performance SRDA
• 20 REDBs - Core operational
• Business support
• Contracts - SRDA economic
• Labour initiatives DDRR
• -Performance coordination of
• Education Training Contract provincial
  support
• Institutions negotiations - Cabinet Committee
• on Rural Revitalization
• Other Community - Regional offices
• Groups Interests (RED-Cs)

7
PERFORMANCE CONTRACT

• A MUTUALLY BINDING AGREEMENT BETWEEN GOVERNMENT
  AND NON-GOVERNMENTAL ORGANIZATIONS COMMITTED TO
  MEET SPECIFICI CRITERIA ON NEGOTIATIED FUNCTIONS

8
PERFORMANCE CONTRACTING CYCLE

• A Contracting Cycle can be derived from the first
  seven Fundament Principles of Performance
  Contracts.

(1) Prepare Performance Improvement
Plan (Strategic Economic Plan)
(2) Draw up Performance Contract
(5) Reward Performance
(3) Monitor through Information System
(4) Evaluate Performance
9
FUNDAMENTAL PRINCIPLES OF PERFORMANCE CONTRACTS

• Performance criteria and targets should be
  derived from a three to five year plan designed
  to improve performance
• -This plan must be well known and understood by
  all parties involved (both the SRDA Committee and
  REDBs)
• The performance plan must be consistent with both
  governmental and non-governmental goals.
• There must be coordination between organizations
  which should in effect improve the performance of
  the zone as well as government agencies.
• All the performance criteria should be combined
  into an explicit set of weights to enable
  comparison between organizations.
• Performance criteria should include only areas
  within the control of the management of the
  organization, and target levels should be
  adjusted when major factors outside the control
  of managers change.

10

• Once performance criteria have been set, zone
  boards should be able to use their own discretion
  in achieving the performance goals (subject only
  to government policies and guidelines and
  monitoring/management information systems).
• - Performance of the organization should be
  examined yearly in terms of the targets
  negotiated at the beginning of the year.
• - If some of the initial targets have proven to
  be unachievable, the evaluation process should
  take into account the impact of those changes on
  performance
• A reward should be linked to successful
  performance
• - If performance is weak, future funding should
  be withheld.
• - This link between performance and future
  funding should motivate individuals to carry out
  the necessary work to make the contract succeed.

11

• There must be a small government group to
  establish policy matters relating to the
  organization.
• - the REDBs should have more information for
  planning and control but the SRDA Committee
  must increase their knowledge base
• - SRDA Committee would be responsible for
  running the contracting system on schedule and
  produce periodic reports on functional aspects
  of the overall performance on the REDB
• 9. A committee should conduct the preparatory
  work on strategic planning and contracting.
• - meetings should be conducted on a regular
  basis to educate members on key issues and to
  obtain views
• - SRDA Committee would be responsible for
  clarifying goals and priorities
• - Each REDB would be tailor made to fit the
  needs of that particular region.
• 10. Committee discussions should be integrated
  with decision making at higher levels of
  government.

12

• Performance Contracts will
• Ensure that operations of the REDBs are clearly
  defined and well understood
• Set performance goals and outline strategies for
  their attainment
• Ensure the application of the best management
  practices
• Provide a means to monitor performance and ensure
  continuous progress towards goals
• Have the flexibility to encourage the application
  of new initiatives and innovations during the
  process

13
Performance Contracts

• Wealth generation and employment
• Five year period
• Monitored and adjusted annually
• Provide for five functions and guided by
• sustainable development and stewardship
• professional staff and management
• skill development and training
• performance criteria specified

14
REDB Performance Contracts Development
Participatory NOT out of a Policy Book

• Making it up as we go along
• policy / frameworks should not be developed in
  isolation from practice / implementation
• Government-community collaboration
• OUR process
• Outside expertise Dr. Robert Bish
• Provisional Board Zone Unit Collaboration

15
Performance Contracts and Regional Economic
Development

• Performance Contracts
• Core funding
• Strategic Economic Plan
• Establish shared priorities with federal and
  provincial governments
• Monitoring and Evaluation Framework

16
Negotiation of Performance Contracts

• Core Contract
• Draft SEP submitted to DDRR
• Goals and Objectives sent to Appropriate
  Departments
• Government commentary sent to REDB
• Final SEP, Workplan and Budget submitted
• Negotiations
• Review by Cabinet Committee on Rural
  Revitalization
• Signed by Ministers of DDRR and ACOA

17
Performance Contracts

• Structure

• Main Contract SEP
• - SEP Vision, Goals and Objectives
• - REDB and Government Inputs to Core Functions
• - budget
• - monitoring and evaluation requirements
• - administrative matters
• - signed by lead federal and provincial
  departments
• Sector Development Strategies MOUs
• REDB and Government commitments
• Signed by participating departments
• Negotiated on basis of proposed sector
  development plans

18
MOU (As Negotiated)
GOALS
Develop Tourism Industry
Cultural Tourism
Winter Tourism
Recreational Tourism
Tourism Training
Corporation Inputs Government Inputs
TARGETS 1.1 1.2 1.3
TARGETS 2.1 2.2
TARGETS 3.1 3.2
TARGETS 4.1 4.2
Initiatives 1.1.1 1.1.2
Initiatives 2.1.1 2.1.2
Initiatives 3.1.1 3.1.2
Initiatives 4.1.1 4.1.2
Sign-off
19
Development Strategy MOUs

• SEPs contain sectoral strategies
• MOUs developed to implement sectoral strategies
• Initiated by REDBs with relevant federal and
  provincial departments
• Will reflect commitments by all partners to
  sectoral strategy
• Possible Government Inputs
• Financing, Information, Technical, Regulatory
• Approved and signed by relevant Departments

20
Data Collection / Management Monitoring and
Evaluation

• local / zonal collection
• provincial collection
• data sharing
• value-added applications
• quarterly reports
• annual reports

21
COMMON PROBLEMS WITH PERFORMANCE CONTRACTS

• Government inability to keep financial promises
  and inability of the organization to pressure
  government into honoring those commitments.
• Organizational and governmental performance
  targets in the contact are not specifically
  stated.
• Organizations are not given the control they need
  to achieve the targets in the contract.
• The contract is too long and complex to be
  effective.
• Flexibility is not provided for in the contract.
• - The contract should be revised if initial
  assumptions prove inaccurate.

22

• Negotiating and implementing a contract with an
  organization that has a low performance level is
  usually extremely difficult.
• - This refers to the past history of the
  organization. There must be a certain level of
  stability and optimism present to negotiate a
  successful contract.
• Inaccurate performance indicators.
• Acceptance of a performance contract before a
  thorough examination and question period.
• - Contracts must have realistic targets that are
  attainable.

23
Performance Contracts and Regional Economic
Development

• What didnt work?
• Senior Bureaucracy buy-in
• Provincial Political buy-in after Clyde Wells
  stepped down
• Dont confuse decentralization with
  de-concentration
• Monitoring Evaluation Frameworks need
  dedicated, resourced champions
• Horizontal Policy Development Implementation
  needs dedicated, resourced champions

24
What is good evaluation?

• Evaluation necessary for accountability
• Fright, Fight, Flight
• Partnerships raise the stakes and enhance the
  chances
• Fed-Prov Agreements
• Performance Contracts
• P3s
• Power Matters
• Transparency Matters
• Resourcing is Critical
• Relevance, Communications
• Doability
• Commitment Frameworks vs. Culture - What is to
  be done?!!!