The language of outcomes, impacts and objectives

The Public Finance Act 1989 (as amended by the Public Finance Amendment Act 2004) provides a definition of "outcomes" and "impacts" which applies to departments and Crown entities. We have provided indicative examples to help distinguish between these concepts. We recommend you read more about these concepts at either the Managing for Outcomes or the Pathfinder Project sites (see references at the back of this guidance document).

"Outcome" means a state or condition of society, the economy or the environment and includes a change in that state or condition. It normally describes a state or condition that is influenced by many different factors which may operate independently and where attributing change to the activities of one agency is very difficult.

"Impact" means the contribution made to an outcome by a specified set of goods and services (outputs), or actions, or both. It normally describes results that are directly attributable to the activity of an agency.

Objectives examples: Increasing the take-up of programmes - in the examples above (i.e. motor vehicle crash deaths and injuries, life expectancy at birth and at age one year) this might mean improving access to, and public confidence in, programmes designed to have the impact described Improving the retention of key staff - in the examples above this might mean the retention of skilled and experienced road safety analysts, immunisation coordinators etc Improving revenue, increasing operating surplus. This is most likely to apply to activities whose aim is to raise revenue through voluntary third party demand for goods and services Improving the efficiency of the entity's operations

"Objectives" is not defined in the legislation. Its inclusion alongside "impacts" and "outcomes" recognises that not all outputs and activities are intended to achieve "outcomes" as that term is defined above. Some outputs and activities do not target a direct societal, economic or environmental effect, and their effectiveness should not be judged on that basis. Nevertheless, they can be important in the context of Crown entities' performance, and objectives will feature in the shaping of some entities' results-focused planning.

Central agency advice given to Public Service chief executives recognises that many factors influence outcomes. Some are in their control; others are not. Because of this, Public Service chief executives are not held accountable for achieving outcomes but are held accountable for "managing for outcomes" - for planning (and delivering) their outputs or activities to maximise the results sought given the resources available. Chief executives continue to be accountable for the delivery of outputs and for altering the mix of outputs as circumstances dictate and resources allow.

The same distinction is important for you. The Crown entity's Board (and as delegations permit, the chief executive) has a responsibility to set and report on the impacts, outcomes and/or objectives the entity seeks to contribute to or achieve, to operate consistently with them, and to provide information to the Responsible Minister and to Parliament on the results.