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Measuring WASH sustainability in a payment by results context

Andy Robinson, Lead Verifier for SNV, reports back from a WEDC Conference panel session organised by the three WASH Results suppliers

The three suppliers in the DFID WASH Results programme (SAWRP consortium, SWIFT consortium and SNV) came together at a side event held during the WEDC Conference in Kumasi, Ghana (11-15 July 2016) to present their thoughts on “measuring WASH sustainability in a Payment by Results (PBR) context”.

As Lead Verifier on the SNV contract and WEDC conference participant, I was invited to join the panel with the three suppliers and make a short presentation on behalf of the e-Pact consortium – to explain e-Pact’s role in WASH Results and elaborate some of the initial learning from the perspective of our Monitoring and Verification (MV) team.

Kevin Sansom (WEDC, SAWRP) began by outlining the key differences between PBR and grant programmes. He noted that PBR programmes require significant pre-finance and engender higher risks (particularly when tight timelines are applied), but allow greater flexibility and encourage more rigorous monitoring and evaluation (both internally, within the implementing agencies and externally by the verification and evaluation teams).

SAWRP presentation

Mimi Coultas (Plan UK) detailed the sustainability monitoring system adopted by the SAWRP consortium, explaining that some of the elements (sustainability assessment frameworks, outcome implementation manuals and the learning framework) are not linked to payments, but are designed to meet DFID’s requirement for reporting against five different dimensions of sustainability (functional, institutional, financial, environmental and equity).

Mimi noted that there was a lack of clarity at the outset around the criteria for payment (and the criteria for disallowance of payments), which caused some problems and could have been avoided by agreeing these details during a longer inception phase. She also suggested that the sampling approach used by the MV team has the potential “to scale mistakes” by exaggerating the effect of any poor results included in the sample (to suggest problems larger than actuality). Another comment was that the commercial pressures on the suppliers, all of whom are interested in bidding for any follow-on programmes, might have reduced collaboration and sharing of lessons learned.

Nonetheless, the SAWRP consortium felt that the programme had produced “amazing results”, with a high level of confidence in the quality and reliability of the results due to the strong scrutiny provided by the MV team. Mimi also noted that the monitoring and evaluation (M&E) focus required by the programme was a positive outcome, leading to a strengthening of M&E systems and the development of better ways of measuring WASH outcomes and sustainability. However, a longer programme duration would have been better, including an inception period during which the results framework and verification approaches could be carefully designed and negotiated.

SNV presentation

Anne Mutta (SNV) talked about the critical importance of political engagement to WASH sustainability, with governance activities integrated into the SNV programme from the start to address this requirement. Where local government capacity for sanitation and hygiene is low, sustainable results will obviously be harder to achieve. She also noted that some practical sustainability problems arise, such as heavy rain and flooding (which can wash away sanitation facilities, and constrain implementation) and changes in capacity, knowledge and commitment due to issues like government transfers or elections. Anne also agreed that the PBR programme required stronger progress monitoring, to track results and allow course corrections before the household survey results are verified.

SWIFT presentation

Rachel Stevens (TEARFUND) explained that the SWIFT consortium is using household, water point and latrine surveys, as well as local government and local service provider data, to assess sustainability (with two sets of surveys planned – one in mid-2016 and the other at end-2017). The SWIFT sustainability assessments use a similar traffic light system to those described by the other two suppliers, reporting against DFID’s five dimensions of sustainability.

Common challenges

The three suppliers had agreed on a list of common challenges, which were presented by Mimi Coultas (Plan UK). One of the most interesting of these was the risk that PBR encourages implementation in easier contexts – through the selection of less vulnerable and more accessible communities and project areas – in order to reduce both cost and risk.

The suppliers also questioned whether verification was appropriate for all aspects of sustainability, particularly the intangible and more qualitative factors (such as community empowerment), which are often important elements associated with the sustainability of sanitation and hygiene practices and outcomes.

Another potential issue is that the reduced reporting burden, with the production of evidence of results generally replacing the need for the detailed progress reporting and evaluation required by conventional programmes, may mean that the lessons learned by the programmes are not well captured or adequately documented.

Common opportunities

The suppliers agreed that, while some aspects of sustainability may be missed, the inclusion of payments for specific sustainability outcomes led to more attention to sustainability than in conventional programmes. Furthermore, the MV team’s work had encouraged greater transparency and accountability.

MV presentation

I made a short presentation on the role of the MV team and the key challenges and opportunities. After describing the composition of the e-Pact team, and introducing Bertha Darteh (Ghana country verifier for the SNV programme, who was in the audience), I explained that we were using “systems-based verification” rather than fully independent verification, which means that we are reliant on the data and reports produced by the suppliers’ M&E systems. As a result, we have to understand these systems well, and identify any weaknesses and any potential for errors, misreporting or gaming of results. DFID’s decision to adopt a systems-based verification approach was based on the assumption it would be cheaper than statistically sampled independent surveys (across such a large population), but the MV experience suggests that there are a lot of unforeseen costs (often to the suppliers) related to this systems-based approach.

Key verification challenges include the large number of closely spaced results, with little time between each verification cycle for the design, review and improvement of the verification process. The SNV programme includes nine country projects, with significant variations in context across the projects, which requires considerable flexibility in the verification system; whereas the other two suppliers’ programmes include multiple implementation partners, each of which has slightly different monitoring and reporting systems, and different priorities and targets, which in turn require adaptation of the verification systems.

I concurred that not enough time had been provided up front for the planning and design of the programme, including the MV framework and activities, which increased the pressure on all stakeholders during the first year of the programme, when suppliers were developing systems, implementing and reporting, with little time to respond to the additional demands of the verification process.

One positive outcome of the need for verified results has been the use of smartphone survey applications, which have greatly sped up and reduced the cost of the survey process; improved data processing and quality control; and made it much easier to verify large-scale results quickly. A key learning from the PBR programme is that these household surveys appear to be a far quicker and more effective way of evaluating programme outcomes than conventional evaluations.

Overall, the PBR approach appears to be improving M&E approaches and systems, encouraging more thinking about how to measure and evidence outcomes and sustainability, and providing reliable feedback on progress and performance at regular intervals during the life of the programme. This feedback enables regular improvements to be made to programme policy, planning and practice (unlike conventional programmes, which often are not rigorously evaluated until the end of the programme duration).

Questions from the floor

When the panel was asked whether the PBR approach encourages efficiency, the suppliers noted that both the programme and the approach encourage scale, which in turn encourages efficiency; however, the additional costs of verification and the related reporting were thought to partially offset the efficiency gains.

A similar question was asked about whether PBR encouraged value-for-money: the suppliers suggested that they are very confident of their results (compared to conventional programmes, which may over-report results), thus the cost-per-result is clear. They also noted that there is an incentive to reduce costs, but that these reductions may not always be passed on (and, because there is no payment for over-achievement in this programme, any additional results appear to reduce the cost per outcome/result, but do not change the suppliers’ fixed costs).

Several Ghanaian participants expressed their confusion about the new terminology associated with PBR. Output based Aid (OBA) is common in Ghana, notably through a World Bank WASH programme (with payments linked to toilet construction), and it was suggested that there “was no need to introduce yet another acronym for the same thing”. Louise Medland (WEDC, SAWRP) responded that DFID differentiated between the OBA and PBR approaches by the PBR focus on outcomes (whereas OBA focuses on outputs).

The final question was around PBR’s effect on innovation: the suppliers noted that the design was supposed to encourage innovation, but that the time pressure (of the short implementation period) limited the chance of innovation. I added that we have seen different outcomes in different contexts – in low capacity settings, the programme management generally provide firm guidelines to the project team to minimise risk; but in high capacity settings, there was evidence of innovation driven by the need to achieve results, especially in more difficult contexts where standard approaches were not working.

The general tone of the PBR session was positive, with the suppliers agreeing that the PBR approach has led to reliable and large-scale results, and that the need to report and verify results has led to significant improvements in M&E systems. A lot of learning has taken place, and the suppliers hoped that this learning will inform the design of any future WASH PBR programmes.

Andy Robinson, Lead Verifier on the SNV Contract, WASH Results MVE Team

The paybacks and pains of Payment by Results (Part 2)

Our series of reflections on WASH Results’ learning continues by exploring value and costs in a Payment by Results (PBR) programme.

DFID has been clear from the outset about what it wants from the Water, Sanitation and Hygiene (WASH) Results Programme: WASH interventions delivered at scale within a short time-frame and confidence in the results being reported to the UK taxpayer. DFID got what it wanted, but at what cost? In this post we build on discussions at the WASH Results Programme’s learning event held earlier this year which looked beyond the numbers of people reached with interventions to explore some of the challenges faced in implementing the programme.

Can PBR frameworks be designed to incentivise suppliers to focus on the “harder to reach”

A central theme in the workshop was the ongoing puzzle of how to place value (both in commercial/financial and Value for Money terms) on intangible aspirations and benefits, such as reaching the most vulnerable and investing in the processes and social capital that underpin effective programming. So, does the importance placed by a donor on achieving clearly costed, verified results risk squeezing out other values and principles that are central to development programming? Which values might end up being pushed aside and could this be mitigated through better design?

1. High quality programming

Suppliers hit a major challenge during tendering when DFID asked them to provide a price per beneficiary that reflected the cost to the suppliers of reaching that beneficiary. But calculating this cost is complex. Potential suppliers have to think about what kind of costs they should fold into that price per beneficiary when bidding: the more the costs, the higher the bid. During the workshop one Supplier asked rhetorically “Should we say $20 with alignment and $23 without?”

There is some apprehensiveness within the NGO sector about competing with the private sector in this commercial context and they are often advised to be cautious. Will they be undercut by commercial organisations submitting more attractive (read cheaper) bids that lack the added benefits that NGOs can bring: the social capital and ways of working that are difficult to put a commercial value on but will affect the quality of the programming?

DFID has been clear that it does not equate Value for Money (VfM) with “cheap” and it is willing to pay for quality programming, whoever is best placed to deliver it. One improvement to the tendering process would be to articulate some of these added benefits (such as existing relationships and social capital in a programme area) as requirements for bidders. Potential suppliers would thus need to provide evidence within the bidding process.

2. Reaching the hardest to reach 

A criticism levelled at PBR is that by using a fixed “price per beneficiary” approach, it encourages suppliers to focus on people who are easier to reach, a practice sometimes described as “creaming” or “cherry picking”. Stakeholders in the WASH Results Programme are firmly committed to inclusion and during the workshop investigated how that could be incentivised better within a PBR framework. Options explored included multi-tiered price per beneficiary frameworks (as used in drug and alcohol recovery programmes in the UK) although these carry the risk of increasing complexity and reducing flexibility. Another suggestion for incentivising inclusion was careful selection and wording of the objectives and appropriate verification processes in the tender document, however this may risk compromising the flexibility to negotiate targets and verification approaches in response to different contexts.

3. Investing for the future

One related but different challenge that emerged during the workshop was that of placing commercial value on activities that invest for future work in the sector. This includes building the social capital to work with local stakeholders and investing in programmatic innovation (which some suppliers suggested had not been possible under the WASH Results Programme). Do the practical implications of PBR risk capitalising on previous investment made by suppliers, without contributing to it in turn? This is perhaps not an issue while PBR contracts constitute a small proportion of aid financing but would become more so if PBR contracts started to dominate. On the other hand, the benefits that suppliers report, particularly in terms of strengthening monitoring and reporting systems to enable more rigorous real-time results tracking may also spill over into other programmes, benefitting them in turn. It is too early to draw conclusions but it may be the case that a range of different aid mechanisms are required, with the benefits and limitations of each clearly identified.

4. Confidence in results

Finally, it is worth observing the possible trade-off between the value placed by DFID on confidence in results that is so important for communicating with taxpayers, and the effectiveness of aid spending that can be achieved through PBR and the nature of the results it produces. Verification is undoubtedly costly (someone paid you to come here just to look at that toilet?” a baffled resident of a beneficiary village is reported to have asked of a verification team member).

But there is another aspect of effectiveness: if PBR prompts suppliers to focus their efforts on what can be counted (i.e. what can be verified at scale without incurring prohibitive expense), this may shift their efforts away from development programming with longer-term and more uncertain outcomes. Put simply, this could equate to building toilets rather than working on sanitation behaviour change interventions, that are considered to generate more sustainable positive outcomes. Of course there is no guarantee other forms of aid financing will generate these results and as there is likely to be less focus on measuring those results, comparison would be difficult.

Advice for PBR commissioners

What might this mean for those considering PBR modalities and designing PBR programmes? The experience of WASH Results so far suggests that when designing a PBR programme, commissioners need to:

  • be clear on the value implied in “value for money” – consider all of the “values” that are important, including the value of donor confidence in results;
  • strike a balance between clearly specifying expected results (particularly for more vulnerable people) and being flexible to the contexts in which suppliers are operating;
  • think creatively and collaboratively about how long-term outcomes can be measured;
  • explore hybrid funding models but avoid creating the “worst of all worlds” that lacks the flexibility of PBR, increases complexity and imposes multiple reporting frameworks;
  • consider whether PBR is the right funding mechanism for the kinds of results you wish to achieve (tools are emerging that can help) ;
  • view the PBR component in the context of the broad spectrum of funding to the sector – seek to maximise linkages and mutual value across the sector.

Catherine Fisher, Learning Advisor, WASH Results MVE Team

The report from the WASH Results learning workshop is available to download from DFID’s Research for Development website. 

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