Managing Change for Improving Service Delivery

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Managing Change for Improving Service Delivery Learning to embrace the challenge of good governance

March 2008

S.M. Khatib Alam Karin Tang Mahmood Akhtar

City District Government Faisalabad, Pakistan

This document is produced as part of the Strengthening Decentralised Local Government in Faisalabad (SDLGF) Project for the purpose of disseminating lessons learnt from the project. The views are not necessarily those of DFID or the City District Government Faisalabad (c) SDLGF March 2008 Parts of this case study may be reproduced for educational use, provided that such material is not printed and sold.

The authors expect that, any material which is used will be acknowledged accordingly.

Printed by: FaizBakht Printers, The Mall, Jhang (Punjab) Pakistan.

VISION “Pre-empting Poverty, Promoting Prosperity”

MISSION STATEMENT “We will provide high quality services which compare with the best in the country. We will work with everyone who wants a better future for our District. We will establish an efficient, effective and accountable District Local Government, which is committed to respecting and upholding women, men and children’s basic human rights, responsive towards people’s needs, committed to poverty reduction and capable of meeting the challenges of the 21st Century. Our actions will be driven by the concerns of local people”

ACKNOWLEDGMENTS This case study is the culmination of efforts by a number of individuals from government and the technical assistance team. Firstly it is important to thank all those who have cooperated with the team preparing this case study not only in the last few weeks but over the course of the last four years. They have been critical to the work and demonstrated what is possible to achieve in government when the right set of conditions prevail.

We would also like to thank the communities and elected representatives of the district that assisted the SPU team in implementing this project and its various components.

The authors wish to thank Rana Zahid Tauseef, City District Nazim; Maj (Retd.) Azam Suleman Khan, District Coordination Officer; and Dr. Tariq Sardar, EDO Finance & Planning for their valuable contribution in making this project a huge success.

We are also thankful to: Mr. Ch. Zahid Nazir, ex-District Nazim Faisalabad; Mr. Tahir Hussain, ex-DCO Faisalabad and Mr. Athar Hussain Khan Sial, ex-DCO Faisalabad for their valuable contribution to the success of this project.

We are further thankful to all CDGF employees (past and present) and CDGF partner departments but we would like to specifically mention by name the following: Mr. Syed Mumtaz Hussain Shah, EDO Education; Mr. Shabbir Ahmad Ch., EDO Community Development; Mr. Ashiq Hussain Dogar, EDO Information Technology; Mr. Hassan Raza Saeed, District Officer, Human Resource Management; Mr. Wasim Ajmal, ex-EDO Finance & Planning and Mr. Asad Islam Mahni, ex-EDO Finance & Planning for their efforts in successfully implementing reforms in their departments.

We are thankful to all DFID Project Advisers and Management that have assisted in this project since its start and we would like to specifically thank Mr. Mosharraf Zaidi, Governance Advisor, DFID Pakistan; Mr. Wajahat Anwar, Deputy Program Manager, Accountability and Empowerment team, DFID Pakistan; Ms. Jackie Charlton, DFID; Mr. Alistar Moir, DFID Pakistan and Ms. Nighat-un-Nisa, DFID Pakistan for their continuous support and professional technical guidance since their involvement in 2004.

Our thanks are also to Dr. James Arthur, Dr. Richard Slater, Ms. Janet Gardener, Mr. Kevin Tayler, Mr. Paul Dean and Mr. Shahid Sharif for their valuable inputs throughout the project.

We are thankful to Mehreen Hosain for proof reading the document and all the SPU team members for their dedication, hard work and the many late hours spent designing, implementing and documenting the work of this project. These include: Nadir Ehsan, Imran Yousafzai, Muhammad Shahid Alvi, Muhammad Tariq, Kashif Abbas, Ajaz Durrani, Farhan Yousaf, Muntazir Mehdi, Gul Hafeez Khokhar, Mirza Muhammad Ramzan, Muhammad Sharif, Sumara Khan, Humaira Khan, Saima Sharif, Mubarak Ali, Noor Muhammad Khan, Nuzhat Hanif, Syed Sheraz Akhtar, all the master trainers and training associates of the Institute of Learning, GIS team members, all long and short-term international and national consultants.

FOREWORD City District Government Faisalabad is changing. We are seeking to improve service delivery with particular emphasis on pro-poor sectors through reforms in local systems and processes to manage public resources. In order to achieve this, we have reviewed the various systems and processes that we have in place for managing our own internal affairs and relationships with key stakeholders.

The context of this case study is how the CDGF is moving towards improving the service delivery within the context of Punjab Local Government Ordinance (PLGO 2001) by concentrating initially on improvement of systems and processes. This research mainly focuses on our efforts on the different dimensions of good governance; namely fiscal responsibility; citizen focus; organizational improvements; capacity development and development of reliable information systems.

It is clear that Faisalabad has found that to become more efficient and effective it is extremely important to change the behaviors and mindsets of the people especially the employees of the City District Government. We can only deliver if we are forward thinking, embrace new technologies and management thinking and it pleases me to see that we are now more transparent and accountable to the citizens.

Faisalabad is now a new trajectory and becoming the benchmark for other districts and provinces.

This case study is the first of a series of very interesting research being undertaken by the SPU team of the City District Government Faisalabad. The case study should be beneficial for the other districts to review and improve their existing systems and processes and who are considering bringing about change with a limited amount of resources.

I would like to take the opportunity to thank our City District Nazim for his valuable support to the reforms in our district. I would also like to congratulate my city district team members especially all the EDOs for working to achieve the objectives in their departmental reforms programme. Finally, I would like to thank our major partners in development, the Department for International Development (DFID) UK and their management consultants GHK International Ltd., for assisting Faisalabad City District through the project “Strengthening Decentralized Local Government in Faisalabad�.

Maj. (Rtd.) Azam Suleman Khan District Co-ordination Officer City District Government Faisalabad March 2008 The Clock Tower, symbol of Faisalabad

PREFACE The measures we have taken during the course of the last four year is a testament of our commitment to changing the way we have conducted business in the past. We acknowledge that there were deficiencies in our systems and processes which resulted in the level of service that was being delivered, falling short of the standards that our citizens expected of its local government.

City District Government Faisalabad is committed to reform and change and has set itself a series of challenges. This will result in marked improvements in local governance and public services. The first major step has been to establish a good governance framework, which underpins the reform process and injects life into public services.

This case study discusses a number of very important areas where the CDGF has made progress. Firstly, in systems development this is at the heart of our programme. We have developed a number of information systems that, for the first time, really allowed our administration the opportunity to make informed decisions. Key functions such as Human Resource Management and Finance are now performed methodically with strategic purpose.

The establishment of the Institute of Learning is a major advancement and typifies the innovation that we are striving to harness and support. The implementation of our communication strategy has proved our commitment for being citizen focused. The system of performance appraisals for senior management is a way of introducing “performance oriented� culture within our administration.

Development in the district is being viewed through a long term lens. Our focus is now trying to embed systems, processes and practices that are sustainable and leave lasting change in the way services are provided for our citizens. Ultimately our aim is to achieve good local governance, though sometimes this is constrained by change in policy and resource availability.

We will continue with our endeavors to build a strong local government that is able to respond to the needs of our communities with innovation.

Dr. Tariq Sardar Additional Project Director Strengthening Decentralised Local Government in Faisalabad March 2008

Office of the District Co-ordination Officer, Faisalabad

Table of Contents

TABLE OF CONTENTS ACKNOWLEDGMENTS FOREWORD PREFACE ACRONYMS EXECUTIVE SUMMARY BACKGROUND General Context Specific Context The Reform Process and Change Management

1 05 05 05 06

THE CASE

07

THE DESIGN

08

Overview Change Management Model and Framework for Value Creation Situation analysis and Strategic Operational Planning IMPLEMENTATION Fiscal Responsibility Orgainisational Improvement Citizen Focus Capacity Development Information System

08 08 12 13 13 16 19 21 23

OPPORTUNITIES AND CHALLENGES

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IMPACT

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Strategic Inclusive Integrity, Ethical Efficient Effective Open, Consensual, Participative and responsive Transparent, Accountable Summary of Impacts Sustainability

27 27 27 27 28 28 29 29 29

LESSONS AND REFLECTIONS

33

CONCLUSIONS

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BIBLIOGRAPHY

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Table of Contents FIGURES Figure 1: Figure 2: Figure 3: Figure 4: Figure 5:

Change Management Model and Framework for Value Creation Strategic Operational Plans linked to District Corporate Governance Plan City District Government Cash Flow projections (as of November 2007) The Geographic Information System application The Traditional PIU and the SPU Strengths, Weaknesses and Solutions

08 12 14 24 34

CDGF Guiding Principles for Change Finance & Planning Change Issues HRM Recommendations Progress Against Guiding Principles of Change

09 14 18 30

TABLES Table 1: Table 2: Table 3: Table 4:

Acronyms

ACRONYMS ADB CCB CDGF CIDA CSO DAO DCC DCO DDC DFID DO DTCE EDO FMIS GIS HR HRMIS IoL IT LGO MIS NAM NGO NORAD P&D PIFRA PIU PRMP SDC SDLGF SPU TMA UC UNDP

Asian Development Bank Citizen Community Board City District Government Faisalabad Canadian International Development Agency Civil Society Organisation District Accounts Office District Coordination Council District Coordination Officer District Development Committee Department for International Development District Officer Devolution Trust for Community Empowerment Executive District Officer Financial Management Information System Geographic Information System Human Resources Human Resource Management Information System Institute of Learning Information Technology Local Government Ordinance 2001 Management Information System New Accounting Model Non Governmental Organisation Norwegian Agency for Development Cooperation Planning & Development Project for Improvement in Financial Reporting and Auditing Project Implementation Unit Punjab Resource Management Program Swiss Agency for Development and Cooperation Strengthening Decentralised Local Government in Faisalabad Strategic Policy Unit Town / Tehsil Municipal Administration Union Council United Nations Development Program

Executive Summary

EXECUTIVE SUMMARY In April 2004, in the context of Pakistan's ongoing process of devolution, district government in Faisalabad embarked upon an ambitious institutional change and reform effort which sought to change the ways in which local government works and thereby improve service delivery. This was supported with funding by the UK's Department for International Development (DFID), through its Strengthening Decentralised Local Government in Faisalabad (SDLGF) project.

An Administration Falling Behind The starting point was in 2004, an administration with facing fiscal insolvency with large deficits, lack of strategic direction, an under-developed workforce and poor management systems. It was hampered by low fiscal responsibility, inadequate planning capacity, poor information and weak financial management. There was no real human resource management, no workforce planning and staff morale was low. The administration was typically absorbed by its own internal procedures and processes, and largely deaf to the needs of citizens and communities.

Despite devolution, provincial authorities continued to exercise significant formal and informal control, especially over appointments, promotions and transfers. A critical constraint was the lack of adequate information systems.

Information was still managed using a manual, paper-based system with a high level of inconsistencies, long outdated records and difficult access and retrieval. This made for ad hoc, arbitrary decision-making with neither transparency nor accountability.

A District which Compares with the Best in the Country Nearly four years later in 2008, City District Government Faisalabad (CDGF) has seen a step change in the way it does business, and other districts are asking how they can replicate its success. Financial and human resource management information systems are in place, deficit has been turned to surplus, the administration has demonstrated a clear strategic planning capacity, and has started listening to elected representatives, citizens and some of its poorest communities and consulting with them on how the district budget is to be spent. There is still a widespread need for improvement, but most importantly the administration

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Executive Summary knows the challenges it faces in delivering on its mission, and it can quantify those challenges. It has developed and applied the tools for doing so, and is able to identify solutions to its challenges, and plan and budget to implement those solutions.

How did CDGF Get here?

CDGF's reform and change management programme was governed by a Corporate Plan and a set of departmental Strategic Operational Plans (SOPs), formulated on the basis of the initial information gathering exercise. These defined the mission and values to be adopted by CDGF, and identified the focus areas for reform initiatives: fiscal responsibility; organisational improvement; citizen focus; capacity development; and information systems. It also defined parameters for improvement:

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Strategic: Information tools were put to use in a number of planning exercises which, together with management training and the exercise of leadership, built the capacity of senior staff to think and plan strategically.

Inclusive: CDGF opened up its decision-making processes to a wide and representative constituency, internally and externally. Meetings among senior staff were formalised and regularised. A large number of staff was engaged for the task of implementing the change agenda, building ownership and motivation at all levels of the organisation.

Integrity and ethical: Improvements in transparency placed an expectation of integrity on the administration, which it strives to live up to. CDGF has transformed itself from an inward-looking organisation to one which is much more customerfocused and service-oriented. The definition of a district vision, mission statement and core values has been underpinned by team and morale building initiatives which have taught staff to view their roles strategically, and as part of the larger mission.

Efficient: The introduction of a financial management information system has brought the budget preparation cycle down from 45 to nine days, with the involvement of some 60 officers instead of 1,500. Prudent financial management has created fiscal space allowing district government to address its development and service delivery priorities. Utilisation of the development budget increased 131 per cent in 2007. Similar efficiencies have been achieved in human resource management and the management of CCBs. The ability to rapidly retrieve information on both current staffing levels and projected staffing needs puts CDGF in a better position to deploy resources more effectively.

Effective: CDGF is now in a position to translate efficiency gains into improved effectiveness of service delivery. The creation of fiscal space has created flexibility to undertake social sector targeting, with a poverty reduction agenda informed by an evidence base of survey and GIS data. CCBs in Faisalabad are now an established, functioning institution, prioritising and delivering development projects for their communities. By the end of 2007, the Community Development Department had approved 129 projects, compared with just 16 in June 2004, for which some Rs 175 million had been released.

Open, consensual, participative and responsive: CDGF is reaping the benefits of having opened itself up by sharing information, engaging in public dialogue and inviting participation to stakeholders and the public in general. It has engaged with elected representatives, local NGOs and community members in the local budget

Executive Summary

setting process. Collaborative partnerships have been developed with national and provincial programmes as well as local NGOs. A CCB network has been established to strengthen CCBs and enable them to voice and action their demands on government. A Citizens' Complaint Centre has been established as a channel for ordinary citizens' demands on government. Communications and outreach activities notably street theatre programmes have both informed and sought the views of some 35,000 of the district's poorest communities, including the slums and katchi abadis.

Transparent and accountable: Channels for transparency and accountability have been put in place to serve as an effective check on the powers of government. A key focus has been to promote a culture of evidence based planning and performance based budgeting through the regular publication of financial information.

Key Lessons

Technical change paved the way for deeper institutional change Wide use of existing (human) resources built traction, ownership and sustainability.

A Strategic Policy Unit, insulated yet integrated, was an effective mechanism for delivery of the change agenda. As a non-departmental unit within the office of the DCO, it was ringfenced from the day-to-day pressures and political influence that prevented departments from thinking, planning and acting strategically. But SPU consultants worked within departments and alongside their counterparts to build trust and morale, and to institutionalise the thinking the change and reform agenda, building acceptance and buy-in and underpinning sustainability.

CDGF formulated targeted messages for different stakeholder groups. Training, performance management, the Employee Motivation Survey and the evolution of an HR capacity signalled to staff that the organisation sees them as a resource, to be used strategically and invested in. Wider training for councillors, NGOs and other stakeholders has taught them about the goals of Faisalabad's reform agenda, and the role they can play in bringing about change. The Citizen Perception Survey and other poverty surveys, and their wide dissemination, have signalled to communities that the district takes its service delivery obligations seriously, and that it wants to know what its failings have been so that it can begin to address these. Street theatre performances have ensured that these messages are communicated to precisely those citizens who depend most on adequate provision of public services.

CDGF has seized opportunities when they presented themselves, in pursuit of strategic objectives. For instance, the visit of the President of Pakistan catalysed a concerted strategic planning effort across departments. This has served to leverage individual interventions for wider impact.

CDGF has accommodated political pressure. While the availability of reliable, up-todate data and information has provided CDGF with stronger bargaining power in the District Assembly, it has at the same time looked for ways to incorporate transparently and objectively development priorities identified by councillors. The pressure from the District Assembly for development spending was an important driver of the administration's efforts to create fiscal space.

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Executive Summary

Where Next?

Until now, the emphasis in Faisalabad has been on building capacity to deliver services. This has catalysed some specific improvements in service delivery, but perceptions of service delivery are still poor. The challenge for the future is to shift emphasis to the point of delivery: to apply the tools and skills that have been learned for the visible benefit of communities, and especially the poorest.

City District Nazim Faisalabad sharing reform initiatives at Faisalabad Reforms Seminar (2007)

In order to do so, CDGF is now in a better position to strengthen its relationships with provincial government, donors and other stakeholders. A firm foundation has been laid in establishing those relationships: CDGF now has the evidence and capacity to articulate its needs and priorities, and to make coherent demands of its partners. In short, it is in a stronger bargaining position vis-Ă -vis its international, national and provincial partners. The challenge now is to use that bargaining position to ensure that Faisalabad's reform trajectory is not derailed by lack of funds or political headwinds.

Faisalabad Reforms Seminar (June 2007) attended by provincial government and DFID

National Education Conference (March 2008)

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Background

BACKGROUND The Strategic Policy Unit (SPU) was set up by the Faisalabad district government in 2002, as a policy think-tank. Its key aim was to act as a conduit in the district from which all development programmes could be initiated. In 2004, the United Kingdom's Department for International Development (DFID) agreed to provide technical assistance to the district using the SPU as the platform from which change would be driven.

The SPU over a four year period has acted as a key resource fostering social capital within the city government and often being the focal point for local and international technical assistance and programme development. With a cohort of key technical resources and change management agenda it plays a key role in facilitating public sector reforms and is replicable. It has been instrumental in assisting Faisalabad become a modern administration.

General Context In August 2001, Pakistan initiated its devolution programme with a set of changes to the structure of local government which created nearly 6,500 new local governments with responsibility for a broad range of devolved functions and services. District governments were given functional responsibility in the areas of health and education, agriculture and intradistrict roads. Towns and tehsils were assigned municipal service responsibilities; and union administrations became responsible for small-scale development projects funded from district government allocations. With the new local government structures came new arrangements for sharing of government resources, new electoral arrangements and new opportunities for citizens to participate in the affairs of government. These new responsibilities rested on a set of governance and institutional changes which put in place a new framework of accountabilities for all tiers of local government.

The challenges of organisational restructuring, new functional and service delivery responsibilities, and greater fiscal authority and autonomy together with requirements to ensure citizen focus, accountability and transparency have been huge. The challenges have been complicated by political opposition, of varying degrees, in all provinces; and the lack of visibility on political continuity together with a changing security climate has sometimes worked counter to the smooth implementation of the devolution programme.

Specific Context The challenges have been particularly great for district governments, which have absorbed a large proportion of the devolved functions and powers. These functions were again expanded in 2005 when Faisalabad became a City District. Faisalabad district government also has one of the largest workforces in the country, with nearly 35,000 employees to manage. A critical enabling factor for meeting the many challenges has been the implementation of a comprehensive reform and change management process.

In Faisalabad, this has been initiated by City District Government Faisalabad (CDGF) with support from the UK's Department for International Development (DFID) in the form of the Strengthening Decentralised Local Government in Faisalabad (SDLGF) project. The project has worked towards the realisation of CDGF's stated ambition of building an institution of excellence in district administration and good governance that delivers high quality services to all of its citizens, especially the poor.

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Background Many of the structural and technical issues this work has sought to address applied equally to other cities and districts in Pakistan. The system which existed prior to 2001 did little to promote fiscal responsibility: there was little public access to financial information, and financial reporting was limited. Planning capacity, undermined by poor information and inadequate information and accounting systems, was generally weak.

Organisational improvements envisaged under the devolution programme through the transfer of functions and the physical relocation of staff did not immediately emerge. There was a serious loss of morale among provincial and federal staff posted to districts, and provincial authorities continued to exercise informal control over appointments, promotions and transfers. With little in the way of human resource management or workforce planning, departments were often understaffed and sometimes overstaffed.

Districts have struggled to introduce greater citizen focus to administrations traditionally absorbed by their own internal procedures and processes. Although a new department was introduced at the district level with responsibility for community development (and specifically Citizen Community Boards, CCBs), in Faisalabad this department was severely underresourced and demonstrated limited technical expertise in key areas of community development.

A critical constraint to the operations of local government was the lack of adequate information systems. Some departments may have had one or two computers, but information was still managed using a manual, paper-based system with a high level of errors and inconsistencies, long outdated records and difficult access and retrieval.

Devolution and the creation of new departments, procedures and protocols led to an increase in the volume of vertical and horizontal communications between provincial and district governments that the old, paper-based system could no longer handle. Provinces increased their demands for information from districts though not necessarily through formal or structured mechanisms. Much reporting was on an exceptional basis. Although Faisalabad district government had made progress in managing data, it was struggling with managing information and knowledge as a basis for making informed decisions.

The Reform Process and Change Management Since 2004, Faisalabad's district administration, with the support of the SDLGF project, has worked towards the goal of enhancing the capacity of local government by improving the efficiency, effectiveness, transparency and accountability of district, tehsil (town) and union administrations, and ensuring that local government is responsive to the needs of communities and is capable of addressing the priorities of poor people.

This has taken the form of sector-specific components reflecting a focus on service delivery in education and other departments. Underpinning these sectoral interventions has been an ambitious institutional change and reform effort which has sought to change the ways in which local government works some of them very widespread and long-entrenched as a means of yielding improved service delivery outcomes. This effort has focused on the thematic priorities of: fiscal responsibility, organisational improvement, citizen focus, capacity building and information systems.

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The Case

THE CASE Faisalabad has long enjoyed a reputation for innovation in the provision of public services, and for the willingness of its political and administrative leadership to engage with change and reform. Its response to the service delivery and poverty reduction challenges that have accompanied the implementation of devolution has rested on a comprehensive reform and change management process to build efficiency, effectiveness, accountability, transparency, equity and gender sensitivity; and to establish further principles of good governance such as inclusiveness, integrity, openness and responsiveness (especially to the needs of poor people).

This case study examines the extent to which CDGF has achieved or is achieving this, and identifies areas where there is still more to be done. It seeks to promote an understanding of the type of enabling environment which will nurture and progress reform. In particular, it will highlight successes in catalysing and institutionalising change, identifying the system and process improvements through which change has been effected over the past three and a half years. It will document the specific challenges to good governance; and it will analyse the technical and strategic means by which those challenges have been addressed, and explore opportunities for continuing and deepening results and achievements.

The reforms agenda to address poor school conditions

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The Design

THE DESIGN Overview This section focuses on the approach, design and implementation of the change management and reform process which was intended to address the issues highlighted above.

This case study examines the key steps that CDGF has taken to undertake a change management programme. The goal of the overall reform and change management process in Faisalabad has been to build an institution of excellence in district administration and good governance that delivers high quality services to all of its citizens. This goal has rested on the objective of improving the efficiency, effectiveness, accountability, transparency, equity and gender sensitivity of local government; and ensuring that local government is responsive to the needs of communities, especially the poor.

Change Management Model and Framework for Value Creation Faisalabad district government's strategic response to the identified challenges is laid out in its Corporate Plan: 2004-2009; and in greater detail in a set of Strategic Operational Plans for nine departments of district government.

The Corporate Plan envisaged a change management model based on a framework for value creation which was designed along the lines of a 'balanced scorecard' (Figure 1).

Figure 1:

Change management model and framework for value creation District Vision, Mission Statement and Core Values Fiduciary Perspective

Customer Perspective

“If we succeed, how wil we look to our taxpayers (or donors)”

“To achieve our Mission Statement, how must we look to our customers” Internal Perspective “To satisfy our customers and financial donors, which business processes must we excel at?”

Learning and Growth Perspective “To achieve our vision, how must our district Local Government learn and improve?

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The Design The model served as a means of introducing concepts of value creation and value for money, in pursuit of the district vision, mission and core values. These were: District Vision “Pre-empting Poverty, Promoting Prosperity” District Mission “We will provide high quality services which compare with the best in the country. We will work with everyone who wants a better future for our District. We will establish an efficient, effective and accountable District Local Government, which is committed to respecting and upholding women's, men's and children's basic human rights, responsive towards people's needs, committed to poverty reduction and capable of meeting the challenges of the 21st Century.

Our actions will be driven by the concerns of local people.”

Core Values

Setting high standards; Equality, fairness and respect for human rights; Honesty, Openness and accountability; Building partnerships; Protecting the environment.

Guiding Principles for Change The Corporate Plan lays out a set of guiding principles for change, and identifies possible interventions against each of the guiding principles. The Strategic Operational Plans provide further detail on how these interventions are to be implemented. The guiding principles reflect the objectives of the change management programme. Table 1 lists the principles, with a definition of each.

Table 1:

CDGF guiding principles for change

Strategic

Ensuring consistency between vision, mission statement, goals and objectives and planned use of resources

Inclusiveness

Services are delivered in a fair and equitable manner that benefits all groups according to need and entitlement

Integrity

All transactions are undertaken in an honest and ethical manner

Ethical

Promoting equitable, fair and honest practices

Openness

Transparent consultative and participatory processes and systems

Efficiency

Promoting best use of resources, including finances, people, time and physical attributes

Effective

Service delivery outputs and outcomes meet agreed policy objectives

Consensual

Strengthening representative decision-making processes and mediation of differing interests

Participative

Developing mechanisms for civic engagement and inclusive decision-making

Responsiveness

Service delivery is consistent with citizen demands

Accountable

Departments and individuals can be held to account for service results or standards

Transparent

Enhancing clarity of procedures, systems and decisions

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The Design Key Features The key proposed mechanisms for instituting change were designed to serve five dimensions of good governance:

Fiscal responsibility: Responsible and prudent fiscal management through: effective management of revenue and expenditure allocations; improved budget policy estimation and targeting; streamlined accounting; effective auditing; transparent reporting. The design aimed to support CDGF in the formulation of clear fiscal allocation criteria, improving financial management, raising revenue mobilisation and introducing pro-poor budgeting.

Organisational improvement: Improved deployment of resources, systems and processes to increase internal efficiency and provide more effective and responsive organisation and management to meet strategic objectives. The design aimed to introduce formal organisational development policies, workforce information and planning, and a formal training and development programme.

Citizen focus: Placing citizens at the centre of service delivery processes through: better targeted planning; participatory decision-making; more effective service delivery; greater accountability for results. The design aimed to support CDGF to: establish a Citizen Community Board help desk; develop partnerships with civil society organisations (CSOs); develop a CCB/NGO management information system; introduce communication, monitoring and evaluation mechanisms; build capacity for communities; and introduce a rights-based, pro-poor approach to development.

Capacity development: Developing competencies, knowledge, skills and attitudes of stakeholders through training, mentoring, coaching and job based learning to improve performance and utilisation of resources. The design included: a workforce and skills audit; a training needs assessment; training plans and budgets; and then delivery of skills and knowledge training; a management development programme; and a programme to strengthen district monitoring committees.

Information systems: To ensure that local government makes decisions in an informed manner through the development of management and financial information systems. The design included: development of information management systems for human resource management, community development, and finance & planning; support to strengthen district performance monitoring frameworks; support for improved district communication mechanisms; and the delivery of information technology and systems management training and capacity building.

DCO Faisalabad sharing reforms initiatives with City District Nazim Multan

Implementing Bodies The main unit for implementation of the reform and change management process has been a Strategic Policy Unit (SPU), which had been created by Faisalabad district government in 2002 to act as a “think tank” and to help implement the changes relating to devolution. In 2004, the SPU became the lead unit for the implementation of the reform and change management programme, staffed with technical assistance consultants who would work alongside district government officials in the various departments.

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The Design The participating departments were: Agriculture

Information Technology

Community Development

Municipal Services

Education

Revenue

Finance & Planning

Water & Sanitation (TMA Jaranwala)

Health

Works & Services

Human Resource Management

StakeHolders The key stakeholders guiding implementation have been the District Nazim and the District Coordination Officer (DCO). With the local government elections that took place in the second half of 2005, the Nazim was replaced and a new political administration took office.

There was also a change in DCO in December 2005 and then again in early 2006.

The Executive District Officers (EDOs) in-charge of the participating departments have taken day-to-day responsibility for implementation; there has been a considerable reliance on the cooperation of the EDO for Finance & Planning.

Beyond these frontline stakeholders, CDGF has engaged a broad range of stakeholders both within and outside of government. The most significant of these are: the provincial Government of Punjab, and particularly the Local Government, Finance, Planning & Development department and Change Management Unit; the City District Council; Town/Tehsil Municipal Administrations; the District Development Committee (DDC), which approves the development budget. Outside of government, CDGF has established important relationships with the CCBs which have been created since devolution (with the support of the Community Development Department); and a network of CSOs and NGOs, especially those working through the District Coordination Council (DCC) of NGOs. The SDLGF project is implemented with funding from the UK Department for International Development. The stakeholders also include other donor-funded initiatives such as the Devolution Trust for Community Empowerment (DTCE, funded by UNDP, DFID, Norad and SDC) the Punjab Resource Management Program (PRMP, funded by the Asian Development Bank) and the Urban Unit P&D Department Punjab.

Oversight Bodies and Monitoring Arrangements Strategic oversight of the SDLGF change management programme has been by a Project Management Committee headed by the District Nazim and including the DCO, EDOs from key departments and the Project Manager / Overall Team Leader.

The Local Government Ordinance 2001 (LGO) provides for an extensive monitoring network at all levels of local government, consisting of monitoring committees covering a range of local government functions. Establishing the full complement of monitoring committees, as prescribed in the LGO, has proven a considerable challenge and none have yet been established at district level. At lower tiers of government, those that exist have often been too weak to be able to effectively monitor government activities. Nevertheless, CDGF has provided capacity building to strengthen their ability to hold government to account and sought to foster regular reporting relationships between the monitoring committees and their respective departments.

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The Design

Situation Analysis and Strategic Operational Planning The first six months of implementation, starting from May 2004, were dedicated almost exclusively to information gathering and detailed planning activities. In order to be able to start planning for change, Faisalabad district government had to first create an information base which would serve to inform planning decisions. This was a laborious task of tracking down information that was difficult to access, not always reliable and often incomprehensive.

Basic information such as expenditure and revenue data, staffing numbers and employee details could only be pieced together through many repeat visits to various offices and with the help of a large number of departmental staff.

Brainstorming to identify key change management issues

Putting together a basic, coherent picture of the district's status in terms of available resources and resource use (in the form of departmental situation analysis) was a critical first step for formulating the departmental Strategic Operational Plans. This was one of the earliest exercises to be conducted in consultation with departmental staff, and their participation served to demonstrate a planning process that was based on evidence using available information to inform and substantiate decisions. This was a marked contrast from traditional planning and budgeting practice whereby decisions were made in an ad-hoc, arbitrary manner with neither transparency nor accountability-for sheer lack of good information. Figure 2 provides an overall conceptual layout of the reforms agenda in Faisalabad.

Figure 2:

Strategic Operational Plans linked to District Corporate Governance Plan

District Vision, Mission Statement & Core Values - Value Creation - Gender - Poverty

- Principals of Good Governance - Dimensions of Good Governance

Human Resource Management

Finance and Planning

Community Development

Revenue

Health

Information Technology

Works and Services

Agriculture

Literacy

Law

Example

- Pro-poor budgeting - Gender focused - Principals of good governance - Dimensions of good governance

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Objective

Detailed Tasks

Provide relevant, practical training related to the needs of teachers

Identification of 3 pilot school clusters in 3 Tehsils Needs Assessment developed Team identified and trained Data collected Data analysed Training needs defined

-

-

Inclusiveness Integrity Openness Accountability Responsiveness Efficiency Effectiveness

Fiscal responsibility Citizen focus Organisational improvement Capacity development Information Systems

Education

Performance & Achievement Indicators

Means of Verification

Start Time

Time Allowed

Persons involved

Required

In Budget

Risks / Assumptions

Outsourced

Rs3,000,000

Agreement with EDO Education

Resources

Area 5: School Management and Teacher Training Data on 3 clusters available Training plan designed

Mobilisation reports NA materials available Financial statements Baseline local study NA report

Nov 2004

June 2005

EDO Education, team members, SPU team members

Implementation

IMPLEMENTATION Though some preliminary activities were undertaken in the course of 2004, implementation did not begin in earnest until after the approval of the district Corporate Plan and departmental Strategic Operational Plans by the District Assembly in December 2004. 2005 was very much a year of gearing up, as systems were developed and training was delivered, with system and process changes beginning to be rolled out in December 2005. The change programme was not implemented exclusively by senior staff and the technical assistance team, but involved many hundreds of officers across the administrative hierarchy.

As the main implementing unit, the SPU was staffed mostly by full-time locally recruited consultants assisted by short-term international technical assistance consultants. These worked chiefly through the district departments. EDOs were assigned team leader positions for their respective reform areas, and given responsibility for driving the reform agenda within their department, as well as leading meetings and discussions with the donor.

Technical and financial proposals were prepared for implementation of all reform activities, which could be discussed with the relevant EDO, the Additional Project Director and the DCO, who all had to sign off on the activity before implementation could start. As part of a 'cascading' strategy, EDOs appointed 'master trainers' within their departments who were responsible for passing on training to other departmental staff. Master trainers from the Education Department, for instance, are now in a position to run the Institute of Learning (IoL).

Change initiatives focused on building systems that were absent as a basis from which local government could start delivering quality public services. This building process proved painstaking, but necessary. Progress was charted against a set of key guiding principles, and reported through six-monthly Performance Reports.

By 2007, a consultation process had been initiated for the development of a sustainability strategy which would ensure that key reform initiatives were embedded when the technical assistance came to an end. The exit and sustainability strategy would focus on further developing linkages at provincial and federal level, and continuing to build partnerships with other relevant initiatives and programmes that could help sustain the momentum of reform over a longer time frame.

Below we look at implementation in each of the dimensions of good governance separately, although interventions were necessarily integrated.

Fiscal Responsibility The Strategic Operational Plan for the Finance & Planning (F&P) Department identified 9 change issues to be addressed over the 2004-09 period, each corresponding to different aspects of the overall guiding principles of change (Table 2).

In 2005, district government in Faisalabad found itself in a precarious financial position. Early preparation activities in the F&P Department brought to light the real financial position of the district's accounts a sizeable deficit, due to a large provision that had to be made to adjust for over ambitious development spending prior to 2004. District administration had to accept that the budget for 2005-06 would fall short of resources to implement new development schemes.

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Implementation Table 2:

Finance & Planning change issues Related guiding principles

Sr. No. F&P change issues 1

Develop Financial Management Information System

Efficiency, transparency

2

Introduce devolved (bottom up) planning

Responsiveness, openness

3

Instil professional working culture

Integrity, ethics

4

Release increased funds from provincial government

Effectiveness

5

Build staff capacity for effective planning and budgeting

Effectiveness

6

Planning and budgeting for poverty reduction

Responsiveness

7

Streamline accounts reconciliation process

Efficiency, transparency

8

Adjust budget planning calendar for improved utilisation

Efficiency, effectiveness

9

Streamline procurement processes

Efficiency, transparency

The deficit came to light just as the district was planning to begin dissemination to the general public of budget and expenditure information, beginning with the budget for 2005-06 and expenditure for 2004-05. The objective and expectation of increased transparency served as an important driver of a number of change processes: not only would district government have to account to its stakeholders for its deficit position, it would also have to justify to the District Assembly the likelihood that it would have to temporarily stop new development schemes.

These considerations were a significant motivation for district government to be as well prepared as possible for public scrutiny. Dissemination of district financial information meant that information needed to be systematically collected collated, and coherently presented. It needed to be accurate, and reconciled. All of this required new processes, technologies and skills. Furthermore, opening up the district's finances to public scrutiny meant that officers needed to have figures at their hands to be able to address queries and explain anomalies; and, more importantly, they needed to have a planning system in place that allowed for strategic, objective, efficient and pro-poor budgeting and forecasting, so as to be able to justify budgetary decisions to the District Assembly and other stakeholders, and defend them from political partiality.

Figure 3:

City District Government Cash Flow projections (as of November 2007)

4000

Actual Monthly Expenditure

2500 2000 1500 1000

Nov-06

Oct-06

Sep-06

Aug-06

Jul-06

Jun-06

May-06

Apr-06

Mar-06

Feb-06

Jan-06

Dec-05

Nov-05

Oct-05

Sep-05

-500

Aug-05

500 0

14

Bank Balance without CCB & Vertical Programe

Original Bank Balance at State Bank of Pakistan

3000

Jul-05

Amount in Millions (Pak Rupees)

3500

Implementation Early on, the Finance & Planning Department recognised that it needed to include elected representatives in awareness raising activities around finance-related activities. It needed to address the low ability of staff to deliver professional services, both in terms of their technical skills and their attitude to work. It recognised that it would need to work closely with the District Accounts Office (DAO) if it was going to improve reconciliation of accounts: this was a considerable challenge given that the DAO was a non-devolved office and remained accountable to provincial rather than district government. It recognised that inadequate audit procedures would have to be tightened up. These were the broader, institutional fronts on which the reform and change management programme would work.

In its first year, CDGF embarked on a wide-reaching training programme to bring the skills of Drawing & Disbursing Officers, clerks and accountants in line with what would be required of them to prepare budgets in line with new rules and regulations prescribed by the LGO and provincial government, which required districts to prepare budgets in line with its New Accounting Model (NAM).

Training of DDOs on budget & planning

At the same time, work began on developing a simple Financial Management Information System (FMIS) which would be compatible with systems developed as part of the World Bank's Project for Improvement in Financial Reporting and Auditing (PIFRA). The expectation was that the budgeting process would be sufficiently streamlined to produce an accurate 2005-06 budget, in line with provincial requirements.

By the end of 2005, the Finance & Planning Department was using the FMIS to produce upto-date monthly information on cash flow and expenditure and allowing officers to forecast to the end of the financial year (Figure 3). The ability to provide departments and corporate management with consolidated monthly statements and regular, reliable figures, meant that management could now exercise closer control over departmental expenditure, helping to bring expenditures more in line with the budget.

Following the local government elections which took place in the second half of 2005, the administration presented to the new District Assembly the status of the district's finances, including the severe financial constraints it was currently under. The administration decided

Adjustment entry of Rs. 329.31 Million from account IV to account I in June 2006 (The adjustment account consisted of benevolent funds, GP fund, group insurance etc.)

Extrapolation

Jun-08

May-08

Apr-08

Mar-08

Feb-08

Jan-08

Dec-07

Nov-07

Oct-07

Sep-07

Aug-07

Jul-07

Jun-07

May-07

Apr-07

Mar-07

Feb-07

Jan-07

Dec-06

Actual Data as of 30th November 2007

15

Implementation to halt plans to implement new schemes in the current financial year in order to repay outstanding liabilities. When the budget for 2005-06 was presented to the District Assembly it met with considerable consternation, highlighting the ongoing challenge of how to retain fiscal discipline in the face of political pressure for continued new investment in development projects. Yet at the same time, it served as a driver for renewed emphasis within the administration on exploring avenues for creating 'fiscal space' for new projects.

IT training for the EDOs

The administration had in the intervening months come a long way towards rectifying its fragile financial position. In consultation with provincial government, a number of changes were made in the way the provincial grant was allocated, the grant increased, and some liabilities were deferred. Together with strengthening financial management practices and increased fiscal responsibility-only possible because of the ready availability of sound information these efforts succeeded, so that by the middle of 2007 CDGF was able to report a surplus budget and to begin allocating resources for reform projects that would enable it to fulfil its mandate of delivering more effective and pro-poor services. The ready availability of information made immediate differences in the ability of departments to make important decisions in an informed manner. System changes resulting in improved cash flow were instrumental in improving budget utilisation rates and increasingly meeting budget targets thereby increasing operational efficiency. For 2007-08, improved systems and processes resulted in CDGF producing a budget which created a fiscal space of Rs. 1.5 Billion which was then allocated to development purposes.

By the end of 2005, CDGF had invested in streamlining the budget preparation process and building commensurate skills, and was posting financial reports to the district government website on a monthly basis, with a summary available in both English and Urdu. Reporting practices had become part of the organisational culture (not just in the area of finance); and the practice of reporting performance against targets at monthly EDO conference meetings, linking expenditure to project or programme goals, shows continued progress in the evolution of a performance culture in the organisation. A document management system through which financial information is presented and delivered has further helped to streamline resources required for document retrieval.

Making its financial information publicly available was a first step towards a genuinely participatory budget. In 2005-06, the administration opened up the budgeting process to as many stakeholders as possible, including departments, local NGOs and CSOs, and councillors. A number of stakeholder meetings helped the administration identify areas for improvement, and confirmed that its emphasis on social sector spending (education and health) was consistent with stakeholder priorities. The fiscal space created also enabled the administration to improve responsiveness and start targeting poverty reduction in its budget, through evidence-based planning which would make use of the data and information being generated across a number of activities.

Organisational Improvement Organisational improvement interventions consisted, as laid out in the Corporate Plan, of three main components: Â&#x; Â&#x; Â&#x;

16

Organisational development; Workforce information and planning; Training and development.

Implementation Organisational Development Organisational development rested in large part on the development of the management information systems. These systems served as the process tools through which it would then be possible to tackle change at a more structural and institutional level. CDGF moved rapidly to get new information systems in place and to train staff to use them. This rapid start served to maximise the time available to get the use of the new systems truly embedded in the work of district government; as well as enabling CDGF to move to the substantive change issues.

It was recognised at an early stage that organisational development would require the restructuring of certain departments (specifically the Human Resource Management, Information Technology and Education Departments) in order to provide the right mix and number of resources, and to ensure that resources would be efficiently deployed. Some departments were simply unable to perform their required functions as a result of inadequate structural arrangements or because technical positions were not adequately provided for.

The Education Department lacked coordination, and the duplication of formal and informal roles considerably undermined the effective delivery of services. The Human Resource Management Department was severely understaffed.

DCO’s monthly meeting with EDOs

However, there was no clarity at first over the powers of the district to undertake restructuring.

Over the next three years, district government worked on a number of fronts to build a closer relationship with provincial government counterparts recognising that the initiative needed to come from the district. The Human Resource Management Department took the lead on restructuring, and presented a case to the provincial government. Restructuring plans were finalised in 2007, and presented to provincial government for approval.

One of the priority areas for reform identified under the LGO was the creation of a comprehensive monitoring framework for local government. Faisalabad district government recognised from the outset that, given the weak institutional base of monitoring in the district at the time, one of the first areas of intervention would need to be support to district government to constitute monitoring committees, and to educate both government officials and the members (and potential members) of the monitoring committees as to their role and function.

In the event, this remained on the periphery and implementation was significantly delayed, partly due to the delay in completing the local government elections. Planned capacity development activities were scheduled to take place following the elections. There was also an internal resistance to the monitoring function, out of a fear that monitoring committees would be abused by their members to police the work of government rather than as a means of informed inspection.

Financial information began to be reported on a monthly basis. Internally, formal quarterly performance appraisals were instituted for EDOs; and the practice of predominantly ad-hoc

6 PERFORMANCE REPORT 5

Within district government, there was perhaps a perception that monitoring committees were less of a necessity, especially given the performance management framework that was gradually being established as part of an overall system of checks and balances. From the outset, district government committed to reviewing and reporting on performance on a regular, six-monthly basis, and presenting the findings to the District Assembly.

6

(1st June 2007 to 30th November 2007)

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Implementation meetings was gradually replaced by a formal schedule of regular meetings between the DCO and the District Nazim, and between the DCO and EDOs. Improved communications between officials and departments were further helped by the introduction of email communications in all departments.

Improved communications and the sharing of information among government officials played an important role in building a widespread understanding of the rationale for the changes being embarked upon. This was underpinned by the extent of participation in implementing the changes within the administration: there was wide consultation from the outset, with departmental officials consulted on the preparation of the Strategic Operational Plans and the development of new systems and processes.

Changes to financial and HR policies, in particular, were some of the most consultative, with officers at almost every tier of local government providing input into the reengineering of processes. This was a conscious strategy, not only to leverage professional development opportunities offered by the SPU, but also to involve the entire administration in the process of change, to teach it to become a 'learning organisation', and to begin to build a systemic collaborative working culture within and across departments.

So, for instance, Management Information Systems (MISs) were rolled out by departmental officials (rather than the technical assistance consultants), following training where necessary. Officers from the Community Development Department computerised data on CCBs whereas Assistant Education Officers and clerks from the Education Department administered an Employee Motivation Survey and collected personnel and career information on employees for the Human Resources MIS (HRMIS). By the end of 2005, 124 local government officials were working on a daily basis in support of the reform programme.

An important driver of staff cohesion around the reform and change agenda was the visit of the President of Pakistan in June 2007. The visit was preceded by a concerted exercise, mobilising staff across all departments, to prepare short, medium and long-term development strategies and implementation plans for federal and provincial funding. This resulted in an overall Strategic Development Plan for the district, prepared through a participatory process which was subsequently showcased at a conference for DCOs from across the Punjab.

Workforce Information and Planning The Strategic Operational Plan for the Human Resource Management Department made six recommendations for ensuring an effective human resource function which would contribute to the change management agenda (Table 3). These were: Table 3:

HRM recommendations

Sr. No. HRM recommendations

18

Related guiding principles

1

Develop Human Resource Management Information System

Efficiency, transparency

2

Provision of staff development and training

Strategic, effective

3

Introduction of performance management

Efficiency, effective, accountable, transparent

4

Introduction of reward and recognition mechanisms

Effective, accountable

5

Build employee relations

Inclusiveness, openness

6

Establish effective communications with employees

Openness, transparent

Implementation Development of the HRMIS was the backbone to workforce information and planning improvements. The objective was to move away from an organisation in which resource requirements and resource availability was sometimes very mismatched, to one which would not only know what its resource requirements and resource availability were, but could predict them into the future. HRMIS data also supported the job descriptions and person specifications that were being produced by the Human Resource Management Department in developing a robust framework for performance appraisal.

A critical, but elusive goal of the change agenda was to instil in the administration a professional working culture, in line with principles of integrity and ethics as well as serving principles of efficiency, effectiveness and responsiveness. CDGF began by undertaking an analysis of how non-financial incentive mechanisms might be used to promote better morale and commitment to corporate goals and objectives. This led into an Employee Motivation Survey, canvassing some 29,000 employees, which would, in turn, inform a reward management strategy focusing on non-financial incentives.

District Government employees filling in the employee motivation survey questionnaire

The findings of the survey were stark: 71 per cent believed they were not rewarded for extra effort, 41 per cent saw no career progression, and 31 per cent had received no training. The survey revealed high levels of dissatisfaction among staff. A series of meetings have taken place between management and staff to discuss the results, and will provide material for future management training programmes.

A draft Employee Reward Management Policy Framework was under review at the time of writing, which seeks to address the weaknesses highlighted by the survey to improve motivation and performance. At the same time, however, CDGF had incrementally instituted some measures to improve motivation. These included the performance appraisals of EDOs, and a quarterly award for the best performing EDO. The provision of training at all levels, from senior management down to department clerks, together with the large involvement of staff in delivering the reform and change management programme, also served to instil a sense of purpose in the workforce.

Training and Development As CDGF depended on trained staff to carry forward the reform agenda, a priority in the first six months was to draw up a technical skills-based training programme aimed at middle management and frontline staff to enable them to use the new systems and processes to be implemented across the district.

At a more strategic level, the administration embarked on a strategic training programme for management and leadership including study tours, and external and internal training. These are described in greater detail in capacity development sub section.

Shield for ‘the best employee’ of the Quarter

Citizen Focus Responsiveness to citizen needs has been a key principle behind devolution in Pakistan but one which has been difficult to institute given the fundamental change of orientation it required of local governments that were traditionally inward-looking and dismissive of citizen voice. Although reorienting the work of government to reflect and respond to citizen needs, as articulated by citizens, is an ongoing, long-term process, CDGF has gone to considerable

19

Implementation effort to instil in its workforce more of a service orientation, and an appreciation of the role citizens can play in defining and improving service provision. This has been through a process of education and training, both formal and informal, with SPU staff working alongside counterparts within departments. It has been bolstered by CDGF's willingness to make public as much information as possible on decisions and decision-making around public expenditure, which has built the capacity of citizens to feed into government processes.

The key mechanism for responsive, participatory, citizen-focused service delivery under the LGO is the CCB. As this was a new initiative, districts were, in 2004, still struggling to institute a functioning system for delivery of community development projects through CCBs. CDGF, therefore, prioritised support to the newly-formed Community Development Department, with a focus on enabling it to constitute and register CCBs, and support them through project proposal and implementation.

Some of the early achievements were therefore related to CCBs, which were at the time a high-profile and politically contentious innovation. CDGF established the CCB 'one-window' operation, which streamlined the CCB registration process (and is now being replicated in other districts); and implemented a CCB MIS for the effective management of CCB and project data, as well as funds. Over time, processing times have been reduced from several months to 45 days. Over the course of the next three years, allocations for CCB projects, which had been accumulating over previous years, began to be released and projects began to be implemented.

Public board showing CCB one window desk

These system level improvements were accompanied by institutional initiatives to improve coordination and ownership of CCB work by district government departments.

Representatives from relevant departments now attend a monthly meeting at which major CCB issues, as well as processing times, are discussed and solutions identified for improving efficiency and effectiveness. CDGF has also focused on building citizen capacity more broadly, with an emphasis on strengthening civil society organisations to be able to better participate in and contribute to planning and implementation of development projects. CDGF

A focus group discussion on Citizen Perception Survey (2006)

20

Implementation reactivated the District Coordination Committee (DCC) to serve as a platform through which the district would work together with a network of civil society groups. Where necessary, NGOs received training before joining the DCC; and ongoing training has built the capacity of the members in NGO administration and management.

As the DCC has been strengthened, it has taken on an increasingly important role, facilitating consultation exercises and monthly meetings. It has been networked with other projects and programmes including the National and Punjab Rural Support Programmes and UNDP's National Urban Poverty Alleviation Programme. Increasingly, the DCC is taking on a prominent role in lobbying, advocacy, scrutiny and monitoring of local government service delivery.

A preliminary exercise in improving service delivery was a Citizen Perception Survey, launched in April 2006. The survey covered all 289 union councils in the district, and interviewed 22,000 people. The findings which revealed deep dissatisfaction with public service provision were widely disseminated, including civil society, local politicians and the private sector, as a first step in planning improved service provision. More recently, an audit of existing mechanisms for participation in key service delivery departments has been planned, with a view to developing practical ways to improve participation and responsiveness to citizen needs. Government is now able to allocate funds to target those areas identified by the survey as in need of investment.

District Coordination Council meeting with the DCO

In order to engage citizens at the community level, CDGF has embarked on a substantial outreach and communications exercise. It has built a website, through which government activities are reported and data and information disseminated, and publishes a monthly newsletter in both English and Urdu. In order to reach those who cannot read, CDGF produced a series of radio programmes, and it has staged a series of street theatre programmes as a means of reaching the poorest communities in the slum and katchi abadi areas. In total, these street theatre performances have reached more than 35,000 people with messages such as the role and function of local government, or information about the Citizen Perception Survey. These performances have had considerable success in engaging communities to give voice to their views and needs and for gauging which issues are of most importance to them.

These outreach efforts are complemented by the establishment of a series of 'complaint cells' which encourage citizens to exercise their 'client power' in demanding accountability from local government in service provision. Complaint cells were established within the district departments over the last few years; and in 2007 a district level Customers Call Centre was opened which provided a toll free facility for citizens to lodge complaints about service delivery by the district and lower tiers of government. A forum of focal persons from relevant departments has been constituted to address the complaints lodged.

Capacity Development

Chairman P&D visiting the CDGF’s call centre

One of the earliest priorities was to identify training needs, specifically for officers involved in preparing the district budget. Within a year, more than 900 Drawing & Disbursing Officers and accounts clerks had been trained to prepare the 2005-06 budget in accordance with the new requirements of provincial government. At senior and middle management level, a programme of leadership and management training was started in the second half of 2005.

This included workshops for EDOs and District Officers (DOs) on such subjects as time

21

Implementation management, leadership, new public management and administration tools, finance, IT skills, human resource development. A programme of training was delivered at the Pakistan Institute of Management in Lahore, to be followed up by refresher training to be delivered on site. The provision of a planned, coherent training programme has served the purpose of demonstrating to officials that continuous professional development is now an important consideration for CDGF, and that it is prepared to invest in its key staff. It has visibly strengthened team morale, raised self esteem, and motivated staff to view their roles from a more strategic perspective.

In 2007, senior officers took part in study visits to UK, Hong Kong and Malaysia, with the objective of experiencing how highly efficient and effective local governments function. As well as providing examples of community cohesion and development, stakeholder consultation, performance management systems and public accountability, the visits provided CDGF with a means of benchmarking itself against highly performing administrations. A number of education department staff also visited Sri Lanka and South Africa to fully understand the Whole School Development Process being undertaken in Faisalabad (See separate case study).

Time management training for EDOs

Training for all local councillors (3063 in total) and UC Secretaries started in March 2007 and it covered key aspects of local government functions, including CCBs, participatory planning and the role of monitoring committees. The capacity of City District Council members (413 in total) was also built in the areas of “Budget & Planning and Gender sensitive budgeting” and “Governance, Gender and Poverty”. After an extensive internal Training of Trainers, a multi disciplinary team of master trainers were drawn from the Community Development Department, DCC and the project team which successfully implemented the whole training program.

One of the most significant long-term investments of CDGF has been the establishment of an Institute of Learning (IoL). A number of master trainers for education specific trainings for teachers, head teachers, school councils, community etc, have been prepared that were inducted from the permanent establishment of the education department that have carried forward the capacity development program since the start of implementation.

Training of district council members

22

Implementation

The IOL was intended originally as a training institute for teachers, but over time its mandate has been extended: proposals are now with provincial government for broader subject coverage, and funds have been set aside for development of the institute. The capacity of the DCC of NGOs has also been focussed and were part of many capacity building initiatives, notably among that is an extensive training on “advocacy and Lobbying� which was carried out after conducting a proper TNA.

Information systems CDGF was quick to embark on work in the area of developing information systems, focusing initially on the HRMIS, the FMIS and building a GIS. A prototype FMIS was ready in the first half of 2005 and by the end of the year a simple system was in existence generating financial data in support of the key functions of the Finance & Planning Department. Financial reports were already being discussed at monthly EDO meetings, thereby helping to improve fiscal responsibility and helping the Finance & Planning Department to advise other departments in the confidence that advice was based on accurate and timely information. Further refinements were made to allow for monitoring of expenditure against budget on a monthly basis, enabling closer performance management; and the accumulation of historical information would in time allow for scenario planning. Information that was previously only accessible by senior management can now be accessed (remotely) by decision makers further down the hierarchy. The introduction of online budgeting has reduced the budgeting cycle from 45 days to nine days; and the number of officers involved from 1,500 to around 60.

Training of District Coordination Council

For the HRMIS, data has been collected on some 32,000 employees, allowing managers to analyse data on staff including frontline staff in the education department. This has been a significant contribution to the internal human resource function, with significant saving in terms of cost and time. The system allows for improved planning of resources (to 2025), and provides a centralised, accessible system that enables rapid and easy communication of information between departments and sub-departments. Previously, more than 400 Drawing and Disbursing Officers would have been involved in the task of preparing data on vacant positions across departments, with each officer spending several days on the task. With the HRMIS, now only one officer is required to prepare the same information.

CDGF has also developed a biometric attendance system which has been installed at pilot locations in an effort to control the incidence of absenteeism, improve leave records and identify 'ghost employees'.

The CCB MIS was implemented in the Community Development Department in April 2006, allowing officers to track project progress, verify CCB registration details and monitor project expenditures. The system enables the department to communicate more effectively with CCBs, and provide them with information in a more timely way.

The Revenue MIS includes modules on advertisement boards, commercialization, Commercial Properties (Rent), License fees (Industries), General Bus Stand (GBS), Local Rate and Other Receipts. To date, modules related to Advertisement Boards, Commercialization and Commercial Properties (Rent) have been developed. Information related to commercial and non-commercial properties has also been updated on the Asset Management Module of the Revenue MIS. The staff of the Revenue department is also being trained on this information system.

23

Implementation The Road Management Information System (Road MIS) has been developed to computerize the physical assets of the District government that are related to roads and highways. This MIS serves the purpose of maintaining the details of the District's road profile through road ID numbers. This MIS will help the District government in completing its records pertaining to roads and to manage their repair and maintenance. The provincial government has already instructed the District to prepare complete information on road networks so that sufficient maintenance funds are allocated to protect government assets.

A Geographic Information System (GIS) was launched in 2007, mainly for rural union councils (Figure 4). The urban union councils were to be covered by the World Bank's Urban Unit, placed in the P&D Department. The system will enable evidence based planning especially at the district and UC levels based on up-to-date and accurate data and spatial information; and all UC systems will be integrated so as to feed comprehensive information on local development needs into the CDGF strategic planning process, avoiding duplication of work and enabling resources to be deployed strategically.

All the individual MISs mentioned earlier have now been integrated in the GIS which can generate updated information pulled from these systems, and can collate the same with geospatial information collected as part of the GIS itself.

In short, the introduction of information systems across departments has resulted in fewer personnel taking less time to execute key functions. It provides the basis for improved forecasting and planning capacity, putting district government in a good position to deliver more efficient and effective services. To ensure the sustainability of the MISs, technical and functional documentation regarding each has been prepared for future users, amenders and replicators.

Figure 4:

The Geographic Information System application

Geographic Information System (GIS)

Education Management Information System (EMIS)

Financial Management Information System (FMIS)

Human Resource Management Information System (HRMIS)

24

Opportunities and Challenges

OPPORTUNITIES AND CHALLENGES City District Government Faisalabad, while adhering to the strategic framework laid out in its Corporate Plan, sought to be sufficiently flexibly to be able to respond to and exploit opportunities that were supportive of its overall mission and values. Some of these were known from the outset. For instance, Faisalabad's reputation for its willingness to embrace change in order to improve meant that there was a certain degree of support from the administrative leadership.

The District Nazim and DCO visibly threw their support, at an institutional and personal level, behind the reform and change management agenda; they were keen to take ownership of the change agenda and set an example of leadership which, with the support of the leadership training, cascaded through senior management and was replicated by EDOs and DOs.

Participation of CDGF in Punjab Development Forum (2007)

The District Nazims together with Nazim from a number of Union Councils have participated actively in strategic planning processes and amongst the first indication of this was a providing a strong advocate for the Corporate Plan and Strategic Operational Plans in the District Assembly. The District Nazim was also a keen advocate of Faisalabad's reform and change management agenda at the national and provincial level (e.g. the Punjab Development Forum) and in his exchanges with provincial secretaries. After the 2005 election, the new District Nazim was also very supportive of the change agenda with some difficult decision-making which included agreeing to a restrained budget in order to control the deficit, although this was not in his political interest. He also persuaded his political allies in the District Assembly to keep from overspending.

Successive DCOs since 2004 have also taken a close interest and provided strong support in the reform and change initiatives. The DCO has been the key champion and the focal point for correspondence with EDOs for reform activities, visibly demonstrating the commitment of top management to the changes taking place and setting an example for EDOs and other managers.

The DCO has shown perhaps the greatest ownership, in that the SPU was located within his office absorbing both space and resources. The current DCO has shown very strong leadership and he has been particularly active in building relationships with provincial authorities and brokering their support for reform initiatives acting as an ambassador for the reform programme.

Consequently, Faisalabad's reform and change agenda is well known across the departments of provincial government, with frequent visits from provincial officials including the Chairman of the Planning and Development Punjab who attended a seminar on reforms in 2007, along with four secretaries and DCOs, EDOs Finance and planning and District Nazims from 15 districts across the Punjab. It is on this DCO’s initiative that the Government of the Punjab is currently considering CDGF's proposal for a second phase of the project.

Chairman P&D addressing the audience at Faisalabad reforms seminar

The broad support of senior management was key to enabling CDGF to engage officers across the hierarchy to implement the change programme and ultimately gain traction and embed impacts. This depended on the widespread use of existing staff resources to build systems and implement them attempting to deliver operational and strategic objectives

25

Opportunities and Challenges without these resources would have been a much more costly exercise, with far greater risks to sustainability. That EDOs made staff available, despite being often severely understaffed, has been a critical driver of impact, momentum and sustainability.

The sense of mission was strengthened by a number of anticipated and unanticipated drivers. A comprehensive training programme has served to instil a sense of purpose in officers at all levels; and at senior and middle management level, leadership and management training has demonstrated to staff that the administration values them enough to be willing to invest in their continuous professional development.

Community awareness through street theatre

The visit of the President of Pakistan to Faisalabad was an unanticipated event, which served to mobilise staff across the organisation for several months in the run-up to the visit. The strategic planning exercise which preceded the visit reinforced CDGF's strategic mission, values and goals across the organisation, helping to bring together sometimes disparate departments as they worked towards a shared mission.

City District Government Faisalabad’s communications strategy also served as a means of building the sense of mission. The strategy rested on a relatively simple exercise to collect and organise existing information, and then to publish it to achieve substantive objectives of transparency and integrity. By opening itself up to public scrutiny, local government created an expectation of effectiveness and responsiveness which it would have to try to live up to.

Similarly, by making public its strategic planning documents (the Corporate Plan and the Strategic Operational Plans) district government was locking itself into a reform path which would be less vulnerable to political interference.

CITY DISTRICT GOVERNMENT FAISALABAD

PRE-EMPTING POVERTY AND PROMOTING PROSPERITY

STRATEGIC DEVELOPMENT PLAN

CDGF also made a conscious effort to exploit opportunities to build good working relationships with provincial government, with the DCO taking the lead in correspondence with the province. This has been key to establishing more flexible functional relationships between the district and the province: the rescheduling of the disbursal of provincial funds, for instance, has enabled the district to considerably improve its budget utilisation, and thereby effectiveness.

The challenges to implementation have consisted chiefly of unforeseen delays and the risk posed by political pressure for allocation of development funds. The local government elections scheduled for August 2005 created a decision-making vacuum in the run-up to the elections; they were not concluded until October, delaying a number of training initiatives which targeted local government councillors. Most notably, this compounded low 'political will' within the district for the constitution and institution of monitoring committees.

2006-2011

Pressure from political representatives to allocate development funds to appease their constituents is an enduring feature of local government in Pakistan. The availability and publication of local government financial information has introduced a degree of transparency and accountability in district expenditure which goes some way to curbing the partial allocation of funds. On the other hand, CDGF has also been proactive in seeking to increase the available budget for development spending and creating fiscal space, so that more of the district's development needs may be met. This will be an ongoing tension in the budget formulation process. As the newly instituted systems and processes are embedded, and norms of increased transparency and accountability take hold, that tension should become easier to resolve.

(November 2006)

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Impact

IMPACT The reform and change management programme has had significant impacts on the way in which CDGF functions. In 2004, the administration faced fiscal insolvency with large deficits, lack of strategic direction, an under-developed workforce and poor management systems.

Today, the district sees improvements across the dimensions of good governance.

Strategic

City District Government Faisalabad Strategic Policy Unit

Availability of information systems, and the capacity to use them, has made a considerable difference in the ability of district government to plan strategically, for the long term. These tools have been put to use in a number of planning exercises which, together with management training and the exercise of leadership, has built the capacity of senior staff to think and plan strategically. The results can be seen in the comprehensive Strategic Development Plan the preparation of departmental change management plans and proposals for the restructuring of the Human Resource Management Department.

Inclusive

March 2008

CDGF has learned to open up its decision-making processes to a wide and representative constituency both internally and externally. Many of the change processes were widely discussed within departments, reaching out to staff that were not traditionally consulted on matters relating to their work. This has been helped by the fact that senior staff now meet on a regular basis, allowing for more effective information flows. A large number of staff was also included in implementing the change agenda, building ownership and motivation at all levels of the organisation.

CDGF has initiated discussion on the issue of gender and promoting women at work: gender theme papers have been prepared for key department services, and a district-wide gender strategy will be commissioned shortly through ADB assistance.

Integrity, ethical The improvements in transparency have placed an expectation of integrity on the administration, which it strives to live up to. CDGF has transformed itself from an inwardlooking organisation to one which is much more customer-focused and service-oriented. The definition of a district vision, mission statement and core values has been underpinned by team and morale building initiatives which have taught staff to view their roles strategically, and as part of the larger mission. Fair, honest and inclusive practices have been promoted through the Citizen Perception Survey', which sought honest feedback on the quality of CDGF services; the Employee Motivation Survey, which sought to understand staff morale as a basis for improving motivation and performance; and the introduction of participatory and performance based budgeting concepts.

Experience sharing with other donors: a World Bank visit to the project

Efficient Today, CDGF's budget formulation process is quicker, less resource-intensive and more participatory than ever before. The budget preparation cycle has come down from 45 to nine days, with the involvement of 50-60 officers instead of 1,500 previously. Prudent financial

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Impact management has created fiscal space allowing district government to address its development and service delivery priorities. Utilisation of the development budget increased 131 per cent in 2007.

Similar efficiencies have been achieved in human resource management and the management of CCBs. The HRMIS has centralised data and made it widely accessible, enabling the department to manage and plan its workforce, track HR information, project staffing needs across sectors, and identify staffing gaps and irregularities across the district and within departments. The ability to rapidly retrieve information on both current staffing levels and projected staffing needs puts CDGF in a better position to deploy resources more effectively.

Effective

Experience sharing with other projects: Karachi Mega City project team’s visit to the SPU

The consequences of fiscal prudence and strategic planning are that CDGF is now in a position to translate efficiency gains into improved effectiveness of service delivery. The creation of fiscal space has created flexibility to undertake social sector targeting, with a demonstrable poverty reduction agenda informed by survey, GIS and other data which builds understanding of poverty in the district. CDGF has demonstrated its commitment to prioritising the education and health sectors by increasing budgets in 2007-08 by 12 per cent and 24 per cent respectively. Interventions in education have reached more than 1,000 teachers,357 schools and School Councils and 71,000 children.

CCBs in Faisalabad are now an established, functioning institution, prioritising and delivering development projects for their communities. By the end of 2007, the Community Development Department had approved 129 projects, compared with just 16 in June 2004, for which some Rs 175 million had been released. With the additional resources released by improved financial management and the improved planning capacity of departments, the next step is for CDGF to demonstrate that it is capable of effective service delivery not just in its focus sectors, but across the functions of government.

Open, Consensual, Participative and Responsive CDGF has learned to embrace the views of a wide variety of internal and external stakeholders, and the value of opening itself up by sharing information, engaging in public dialogue and inviting participation to stakeholders and the public in general.

Experience sharing with other donors: a CIDA team’s visit to the project

Over 3,000 elected representatives have received training in participatory planning, and representatives from the District Assembly, local NGOs and community members have participated in the local budget setting process. Collaborative partnerships have been developed with national and provincial programmes as well as local and national NGOs. Through these the capacity of both government staff and CSOs has been built. A CCB network has been established to strengthen CCBs and enable them to voice and action their demands on government. A Customers Call Centre has been established as a channel for ordinary citizens' demands on government.

At the grassroots level, CDGF's communications and outreach activities notably its street theatre programmes have both informed and sought the views of some 35,000 of the district's poorest communities, including the slums and katchi abadis.

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Impact

Transparent, Accountable CDGF has made considerable effort to ensure that channels for transparency and accountability are in place and serve as an effective check on the powers of government. A key focus has been to promote a culture of evidence based planning and performance based budgeting. This is achieved through the publication of the annual budget, detailed monthly district financial information reports and the six-monthly Performance Report. Information gathering exercises such as the Citizen Perception Survey have also been made public.

Summary of Impacts CDGF has reported every six months on its progress in operationalising its guiding principles of change (Table 1). Table 4 summarises the main achievements.

The overview provided by Table 4 gives an indication of the extent to which CDGF is on its way to realising its vision and mission statement. The changes which have taken place in Faisalabad have certainly set an example for districts across Pakistan (building on Faisalabad's long track record as a leading administration).

CDGF has opened up decision-making and implementation to a range of partners, from the political representatives in the District Council, through international donors and national and local civil society, to the communities which are its service delivery customers. The very poorest, including katchi abadi communities, have yet to be integrated into decision-making and planning, but CDGF has made a concerted effort to sensitise them to the work and responsibilities of local government and to seek their views.

There has been a step change in district government performance on measures of efficiency, effectiveness and accountability. While there is still much that can be improved, the foundation has been laid from which to build on the gains of the last three years and improvements from now on are more likely to be incremental and continuous.

District government has shown its concern for basic human rights, especially those of women, and the challenges of poverty reduction. It has engaged in thinking and debate as to how to begin to tackle these challenges now that it has better tools and capacity to do so. The test now is to put that thinking into practice and allocate resources to the implementation of initiatives that will establish basic human rights norms within and outside of government, and begin to lift communities out of poverty. While substantial progress has been made in fulfilling district government's mission, therefore, the challenge of fulfilling its vision is just beginning.

Questionnaire filling for the household survey

Sustainability In the first instance, the new systems and processes have made it easier for CDGF to carry out its existing responsibilities. Intensity of labour has been reduced dramatically across a number of functions, dependency on a long chain of officers and departments to carry out simple tasks has been reduced and processing times shortened. Large numbers of staff were involved in the implementation and now the application of the new routines, which are now viewed as indispensable to the functioning of government. This level of traction indicates a high probability that the new routines will be sustained.

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Impact Table 4: Principles Strategic

Progress against guiding principles of change Attributes

Ensuring consistency between mission statement, goals and objectives and planned use of resources

Inclusive

Integrity Ethical

Services are delivered in a fair and equitable manner that benefits all groups according to need and entitlement All transactions are undertaken in an honest and ethical manner Promoting equitable, fair and honest practices

Efficient

Promoting best use of resources, including finances, people, time and physical attributes

Effective

Service delivery outputs and outcomes meet agreed policy objectives

Better information Departmental gender theme papers Strategic planning ADB approval for Gender Strategy proposal; wide stakeholder consultation on Strategic Development Plan Access to decision-making Wider consultation in budget formulation Better information Citizen Perception Survey; Employee Motivation Survey Promoting equity Gender awareness training Fiscal space Rs 1.5 billion made available and allocated to social spending Improved utilisation Annual increase of 131% in utilisation of district development budget Resource use Staff involved in budgeting process reduced from 1,500 to 60; cycle reduced from 45 days to 9 Increased resources 25% increase in non salary resources Accurate information More accurate reconciliation of annual accounts Outreach & communication 30,000 people in poor and slum communities reached through street theatre programmes; website, newsletters, radio programmes & newspaper articles for information dissemination

Consensual

Strengthening representative decision- making processes and mediation of differing interests

Participative

Developing mechanisms for civic engagement and inclusive decisionmaking

Better information Citizen Perception Survey Partnerships NCHD, DTCE, DCC

Responsive

Service delivery is consistent with citizen demands

CCBs One-window facility; CCB network Better information Customers Call Centre

Accountable

Departments and individuals can be held to account for service results or standards

Incentives for accountability Job descriptions; quarterly performance appraisal for EDOs; monthly EDO conference; performance based budgeting Accountable to public Customers Call Centre

Transparent

Enhancing clarity of procedures, systems and decisions Transparent consultative and participatory processes and systems

Open

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Indicators of Programmes Strategic planning Corporate Plan; Strategic Operational Plans; Strategic Development Plan; departmental change management plans; Strategic Infrastructure Development Plans; Gender Strategy; PC1 for Phase II submitted to Government of Punjab; SNEs for HR, IoL and GIS submitted to Government of Punjab Reporting Six-monthly Performance Reports Tools Integrated MIS: FMIS, HRMIS, CCBMIS, GIS Better information Complaint Call Centre; UC-level household survey of poverty, health & literacy

District Assembly Performance report presented to District Assembly Internal Decisions made through consultation between District Nazim, DCO, EDOs and SPU

Dissemination Financial information, Performance Reports, newsletter, training manuals, Corporate Plan and departmental Strategic Operational Plans available on website Debate Pre-budget consultation

Impact The key risk is that resources will not be allocated to ensure that systems and the information they hold are kept up-to-date. CDGF would also have benefited from more technical assistance time to work more closely with field officers and lower tier operations staff. A renewed training effort in 2007, and the establishment of field based resource centres where field staff can enter data address these concerns to an extent.

Sustainability of systems has been underpinned at an institutional level by a conscious effort to create a sense of mission and purpose within the organisation. While it is difficult to measure this kind of traction, the training, capacity development, outreach and communications activities have all helped to rally staff around a common district vision, mission and values, sustaining the reform momentum. This is an ongoing challenge: the Employee Motivation Survey has revealed high levels of dissatisfaction among staff, and the challenge of keeping them motivated in the absence of financial incentives will be a critical challenge for CDGF. Development of human resource management policies and practice, and the evolution of a robust performance management framework, is an ongoing commitment, in pursuit of a merit-based and motivated workforce.

CDGF has also worked strategically to build closer relationships with counterparts in provincial government. This has served to facilitate reform and change management efforts in certain areas, and to ensure reform is in line with provincial priorities; at the same time, it has built a critical degree of 'buy in' from above, helping to insulate reforms to some extent from arbitrary decisions and reversals of policy.

It has also succeeded in insulating itself more than most districts from arbitrary political decisions by elected representatives. CDGF has built a substantial evidence base for planning and decision-making, established participatory planning procedures, improved transparency of procedures and decision-making, and provided training for local government councillors to help them understand the principles of local government administration, planning and budgeting.

CDGF’s call centre

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Impact While CDGF has put itself on a firmer financial footing, including secured allocations for, eg, improving service delivery, it has embarked on an ambitious and long-term reform agenda with a number of new initiatives planned, for which financing has yet to be secured. CDGF has explored avenues for alternative funding, and applications have been made to other donors and provincial government for discrete projects.

Plans for strengthening the SPU are included in a Sustainability Strategy which has been drafted to map out ways of ensuring that changes are embedded and the reform momentum can be maintained once SDLGF funding ends. CDGF has also given considerable thought to a second phase of the project, to be funded through its own resources, the design of which has been submitted to provincial government. The continuation of the reform momentum through a funded second phase serves as a concrete indicator of the commitment which underpins CDGF's mission to continue progressing towards better government in Faisalabad.

To integrate the change management efforts of different stakeholders at the district and the provincial level, an idea of establishing a Strategic Policy Unity at the provincial level is being discussed. The provincial SPU is likely to be located under the Secretary Local Government and Community Development Department in Lahore. Its main objective will be to support districts to undertake organizational and institutional changes in line with the provincial priorities. The unit will facilitate district reforms, for those that want it, supporting the District Nazim and the DCO office.

One key feature of the provincial SPU would be to establish SPU teams in different districts.

The provincial SPU will provide strategic and technical assistance to district SPUs and it is expected that a Memorandum of Understanding (MOU) will be signed between the district and provincial SPU. The provincial SPU will facilitate the reforms in the districts.

Faisalabad Reforms Seminar (June 2007) attended by Urban Unit of provincial P&D department

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Lessons and Reflections

LESSONS AND REFLECTIONS The analysis for this case study has brought to light a number of lessons which may be instructive for other districts in Pakistan, or South Asia more broadly, seeking to implement a similar change and reform agenda.

Lesson 1:

Technical Change Paved the Way for Deeper Institutional Change

CDGF made a rapid start with information systems initiatives which were uncontroversial, and brought quick, tangible gains to the administration. The creation of management information systems served as a springboard to deeper institutional change in terms of the processes and procedures with which district government conducted its business, and hence efficiency, effectiveness and transparency. Publication of the information introduced a new dimension of accountability for district government, and a new impetus for responsiveness.

Lesson 2:

Wide use of Existing Resources Built Traction, Ownership & Sustainability

Implementation of the reform and change management programme depended critically on senior management making their staff available for training, consultation, design and implementation of initiatives. In total, some 400 permanent government staff were involved in various capacities, including data collection for the HRMIS and Employee Motivation Survey.

This helped to embed the reform process and outcomes deep within the organisation, building buy-in across the hierarchy, building capacity through training and on-the-job learning, and institutionalising new processes to the point where they began to become indispensable.

Lesson 3:

The Strategic Policy Unit Insulated yet Integrated

The Strategic Policy Unit was originally conceived of as a type of 'think tank' which would provide strategy and policy advice, and support departments in developing effective strategies and policies. As a non-departmental unit within the office of the DCO, it was ringfenced from the day-to-day pressures and political influence that often prevented departments from thinking, planning and acting strategically. But, far from keeping an arm's length relationship from departments, SPU worked within departments and alongside their counterparts but with EDOs taking the lead in the change agenda as formal team leaders, and consultants taking a back seat so as to ensure departmental staff would not feel undermined.

This served to build trust and morale, and at the same time helped to institutionalise the thinking around the change and reform agenda, building acceptance and buy-in and underpinning sustainability.

The SPU as a 'hybrid' Project Implementation Unit (PIU) insulated from uncertainty, owned and directed by district government, and working alongside counterparts is being considered for other districts in Pakistan on the basis of the success with which Faisalabad has been able to balance these tensions. The applicability of the model will depend to some extent on the context within which it is being implemented; the experience of Faisalabad shows how some of the weaknesses of traditional PIUs may be averted, although others remain (Figure 5).

Lesson 4:

Targeted Messages for Different Stakeholder Groups

CDGF had distinct, clear messages for different stakeholder groups. Training, performance management, the Employee Motivation Survey and the evolution of an HR capacity signal to

33

Lessons and Reflections staff that the organisation sees them as a resource, to be used strategically and invested in.

Wider training provision, for councillors, NGOs and other stakeholders, has been a means of teaching stakeholders about the goals of Faisalabad's reform agenda, and the role they can play in bringing about change. The Citizen Perception Survey and other poverty surveys, and their wide dissemination, signal to communities and particularly poor communities that the district takes its service delivery obligations seriously, and that it is concerned to know what its failings have been so that it can begin to address these. Street theatre performances have ensured that these messages are communicated to precisely those citizens who depend most on adequate provision of public services.

Figure 5:

The traditional PIU and the SPU strengths, weaknesses and solutions

The Traditional PIU Strengths Weaknesses Clear mission & focus Enclave’ programme May bypass regular management institutional structures Lowers ownership Operational autonomy Weakness line Flexibility in hiring and staff departments incentives Limited capacity Enables rapid development implementation Vested interests and Direct monitoring & competing incentives accountability.

Strips government of Minimises mismanagement proficient staff & corruption in Promotes “PIU-hopping”, lowering morale in civil procurement service Provides opportunities for Difficulties in re-absorption competent offers of PIU staff and functions Strengthens loyalty to donor at expense of coutntry priorities

The SPU CDGF Solutions All decision-making

by CDGF - District Nazim and DCO SPU staff seconded to departments Aligned with existing structures within office of DCO SPU staff working alongside departmental counterparts SPU staff recruited locally and externally Sustainability strategy for continued role Broad inclusion across hierachy in change agenda and ‘mission’

This strategy has been effective in ensuring that the different stakeholder groups understand how they will benefit from the reforms being implemented; and how they might participate.

Lesson 5: Flexible and Opportunistic Approach within a Strategic Framework CDGF has seized opportunities when they have presented themselves, in pursuit of strategic objectives. For instance, the visit of the President of Pakistan catalysed a concerted strategic planning effort across departments; and CDGF has built on the success of the Institute of Learning, originally intended only for teacher training, to expand its remit to other government sectors. This has served to leverage individual interventions for wider impact.

Lesson 6:

Political Accommodation may be Accommodated

While the availability of reliable, up-to-date data and information has provided CDGF with stronger bargaining power in the District Assembly, it has at the same time looked for ways to incorporate transparently and objectively development priorities identified by councillors. The pressure from the District Assembly for development spending was an important driver of the administration's efforts to create fiscal space.

34

Conclusions

CONCLUSIONS City District Government Faisalabad is on its way to fulfilling its mission of becoming an effective, efficient and accountable local government, committed to basic human rights, responsive to people's needs, committed to poverty reduction and capable of meeting the challenges of the 21st century.

It still has much to do. But today, CDGF knows the challenges it faces in delivering on its mission, and it can quantify those challenges. It has developed and applied the tools for doing so, and will continue to refine those tools so as to provide increasingly accurate, appropriate and relevant information. CDGF has identified solutions to many of its challenges, and planned and budgeted to implement those solutions. Some of those plans are being implemented; some are still in need of additional resources.

CDGF has recruited a wide constituency to its mission, including staff, elected representatives, civil society, international donors, federal and provincial government. It has embarked on a programme of learning and change, for the long term. In the first four years, the changes made to the way district government functions have been considerable. So much so, that Faisalabad has become a model of district government in Pakistan.

Until now, the emphasis in Faisalabad has been on building capacity to deliver services. This has catalysed some specific improvements in service delivery, but perceptions of service delivery are still poor. The challenge for the future is to shift emphasis to the point of delivery: to apply the tools and skills that have been learned for the visible benefit of communities, and especially the poorest.

In order to do so, CDGF is now in a better position to strengthen its relationships with provincial government, donors and other stakeholders. A firm foundation has been laid in establishing those relationships: CDGF now has the evidence and capacity to clearly articulate its needs and priorities, and to make coherent demands of its partners. In short, it is in a stronger bargaining position vis-Ă -vis its international, national and provincial partners.

The challenge now is to use that bargaining position to ensure that Faisalabad's reform trajectory is not derailed by lack of funds or political headwinds.

35

Bibliography

BIBLIOGRAPHY Reports 2004 Asian Development Bank, Department for International Development, World Bank.

Devolution in Pakistan: An Assessment & Recommendations for Action City District Reports 2004-2009 District Government Faisalabad, Strategic Policy Unit: Corporate Plan 2004-2009 Community Development Department: Strategic Operational Plan 2004-2009 Finance and Planning Department: Strategic Operational Plan 2004-2009 Human Resource Management Department: Strategic Operational Plan 2004-2009 Information Technology Department: Strategic Operational Plan 2005 Performance Report 1 2005 Performance Report 2 2006 Performance Report 3 2006 Performance Report 4 2007 Performance Report 5 2007 Performance Report 6 2007 Selected Services in Faisalabad: Perceptions and Realities. A Citizen Focus Initiative 2007 Sustainability Strategy

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OUR OTHER PUBLICATIONS 2

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Managing Change

Human Resource Management

for Improving Service Delivery

for Good Governance

Learning to embrace the challenge of good governance

Building local government capacity for effective service delivery

S.M. Khatib Alam Karin Tang Mahmood Akhtar

March 2008

S. M. Khatib Alam David Alan Watson Muhammad Shahid Alvi

March 2008

SelfActualization Esteem (self and others) Social Needs Safety and Security

Basic Physiological Needs

City District Government Faisalabad, Pakistan

City District Government Faisalabad, Pakistan

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3 Financial Management

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Union Council Profiling

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S.M. Khatib Alam Imran Yousafzai

S.M. Khatib Alam Janet Gardener Muhammad Tariq

March 2008

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Communications for Good Governance Building local government capacity for effective service delivery S.M. Khatib Alam Nadir Ehsan Humaira Khan

March 2008

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City District Government Faisalabad, Pakistan

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Citizen Voice in Local Governance

Citizen Engagement

Promising Change

Measuring Change

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Six Case Studies on Whole School Development

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S.M. Khatib Alam Sumara Khan Mehreen Hosain

S.M. Khatib Alam Muhammad Tariq Mehreen Hosain

March 2008

March 2008

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Dr. Fareeha Zafar

March 2008

Dr. Fareeha Zafar

TS ES ER INT ER ITY ETH UN OG MM ING T R E O T TH GC AC OGE TIN GT OR IDIN PP ION DEC SU LTAT U S CON

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Change and Transformation as a Reflective Process

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Changing the dynamics of governance through ICTs

March 2008

Brigid Smith

City District Government Faisalabad, Pakistan

March 2008

Beala Jamil

City District Government Faisalabad, Pakistan

March 2008

S.M. Khatib Alam Nadir Ehsan Kashif Abbas

City District Government Faisalabad, Pakistan

March 2008

Dr. Umar Saif Muntazir Mehdi Gul Hafeez Khokhar

City District Government Faisalabad, Pakistan

All case studies including other reports can be downloaded from the web site: http://www.faisalabad.gov.pk

ABOUT THE AUTHORS S.M. Khatib Alam - Project Manager and Overall Team Leader Khatib Alam is an international management consultant with considerable experience of leading large and diverse teams on multi-disciplinary, complex and challenging projects around the world. He has a particular expertise in strategic management, organisational change management, institutional strengthening, urban development and corporate social investment. Since 2004, he has been the Overall International Team Leader on the innovative DFID funded SDLGF project.

Karin Tang - Development Consultant Karin Tang is a development professional with experience in organisational development, local government and decentralisation. She has contributed to a number of prominent research projects, focusing on aid effectiveness and related issues of donor harmonisation.

Mahmood Akhtar - Monitoring & Evaluation Specialist Mahmood Akhtar has multi disciplinary experience of nineteen years, working both in public and private sectors. Over the last decade he has worked in the areas of social development, local government reforms, governance and change management. He has been working in the project for the last four years as M&E specialist.

City District Government Faisalabad DCO Office, Near Iqbal Stadium Faisalabad, Pakistan Tel: +92 (0) 41 9200205 Fax: +92 (0) 41 9200206 E-mail: email@faisalabad.gov.pk Internet: http://www.faisalabad.gov.pk

Strategic Policy Unit 2nd Floor, DCO Office Near Iqbal Stadium, Faisalabad Pakistan Tel: +92 (0) 41 9201256 Fax: +92 (0) 41 9201257 E-mail: email@spu.com.pk Internet: http://www.spu.com.pk

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