Successful Performance Contracting in 178 Local Authorities in Kenya
The Performance Contracting Steering Committee
Kenya

The Problem

The local authorities in Kenya have for a long time been managed without strategic planning. They have been faced with poor financial management beginning with poor collection of revenue and made worse by lack of financial management systems. They have been managed from a position of inaccurate information further limited by lack of knowledge on the need of the inhabitants.

At inception most local authorities were planned in the background of considerably smaller population of residents. At the time, aspects of planning revolved around basic social amenities, high density housing units and basic schooling facilities. All other social requirements were equally scaled.

Provisions of commercial investments were very limited as the local authorities were mostly set up as local centres. Roads, electricity, water and communication networks were as basic as the needs then envisaged. Planning for expansion for quite a number of local authorities were therefore not provided for.

The leadership has been at two levels. The political class made up of elected councilors. The administrative and technical class made up of officers appointed through the ministry of local authorities. This led to the diversity in the quality of leadership, divergent interest between the councilors and the technocrats and multiple principles originating directives as to the management of the affairs of the local authorities.

Financial shortfalls caused by limited support from central government and poor collection of targeted revenue if at all has been the order of the day in many local authorities

Most local authorities have been faced with increased growth in population. Migration from rural to urban centres has further increased the number of residents nearly in all local authorities.

Over the years, arising from the foregoing local authorities, residents in Kenya have been faced with poor delivery of essential services. In extreme cases, provisions of some due services have stopped all together. Garbage collection services have stalled, health facilities have run down, water quality has been below standards leading to disease outbreaks. The road networks have been in a continuous state of disrepair. Inaccurate records of residents’ dues to the councilor have led to conflicts leading to legal recourse.

Lack of further developments of housing units has led to poor living conditions among residents, stalled developments of further school and health provision facilities.

Reduced commercial activities have led to none or limited employment opportunities to residents of most local authorities.

Overdependence on government revenue by the leadership of most local authorities has blinded the need to look elsewhere for resources that could still be used in their development.

Conclusively, residents of local authorities have for many years faced poor delivery of service and degraded social circumstances.

The second cycle of performance contracting covering the year 2006/2007 was successfully managed for 38 ministries and 125 state corporations. This benefited from the performance contract secretariat’s effort in exposing over 200 government officers to training on improving public sector performance conducted by the Boston Institute of Developing Economies In March 2007, in Nairobi. The results of the entire exercise are due for public announcement. This marks a further achievement due for consideration for another UN Award.

Solution and Key Benefits

 What is the initiative about? (the solution)
The encompassing benefit was the development of 2-5 years strategic plans by individual local authorities. Its compliance was contracted as a target of performance and measured against the achievements relative to the respective annual operational plans for the year 2006/07.

Further, the individual achievements against objectives for the year under contract were targeted under the operational performance criteria. Both qualitative and quantitative means were there after used based on the units of measure against each target

The major beneficiaries in this respect were residents of local authorities as the outputs included improvement in services and infrastructure.

Further achievements were in the area of service delivery where the local authorities developed citizen service delivery charters and targeted their full implementation. Customer satisfaction surveys provided the platforms measuring the basic and thereafter improved levels of residents’ satisfaction as subjects of the respective local authorities

Efforts at improved financial management benefited from targets at improved revenue collection and utilization of allocated funds. Financial discipline was also targeted at deliberate efforts of cost reduction/savings without as much as reduction in the standards of service.

A ratio of recurrent expenditure to development expenditure was introduced with a view to addressing the imbalance between the two sets of expenditure in favour of the later.

Sustainability of improved service delivery to the residents of the local authorities was addressed through a diversity of targets in the performance contracts. This included continuous skill development, automation, service delivery innovation, employee satisfaction, aspects of safety and compliance to statutory obligations. Vulnerability was addressed through measures at corruption eradication and HIV/AIDs behaviourial change.

Actors and Stakeholders

 Who proposed the solution, who implemented it and who were the stakeholders?
The solution was proposed by the secretariat to the performance contracting steering committee through the Ministry of State for Public Services. The implementation was a partnership between the secretariat to the performance steering committee and the Ministry for Local Government being the parent ministry for all local authorities.

The stakeholders in this respect include; the government represented by the Ministry of Local Government and its officers in the respective local authorities. The Ministry of State for Public Affairs through the performance contracting steering committee secretariat, the political leadership of the respective local authorities, the consumers of local authorities services though representation in the Adhoc performance contract evaluation taskforce.

(a) Strategies

 Describe how and when the initiative was implemented by answering these questions
 a.      What were the strategies used to implement the initiative? In no more than 500 words, provide a summary of the main objectives and strategies of the initiative, how they were established and by whom.
The main objective was to have a standard local authorities performance contract framework. The strategy was to adopt the standard public service performance contract to incorporate elements relevant to the local authorities. The actors were the secretariat to the PCSC and the Ministry of local government.

Create awareness and enhance understanding of the concept of performance contracting. Strategies used were, conduct workshops for local authorities on performance contracting. The actors were the secretariat to the PCSC and the Ministry of local government.


Establish the prevailing level of service delivery in local authorities. The strategy was to conduct a sampled baseline survey on various components of service delivery in local authorities. The actors were the secretariat to the PCSC and the Ministry of local government.


To place the local authorities on performance contract. The strategy was to conduct the negotiation, finalization and signing of the respective performance contracts of the local authorities. The actors were the secretariat to the PCSC and the Ministry of local government.

To establish and pronounce the level of performance of the local authorities. The strategy was to evaluate and rank the performance of the local authorities. The actors were the secretariat to the PCSC and the Adhoc evaluation taskforce.

(b) Implementation

 b.      What were the key development and implementation steps and the chronology? No more than 500 words
The initial development and implementation step was the drafting and approval of the performance contract documents for each local authority.

This was followed by the signing of the approved and final performance contract document by the respective parties to the contract.

The third step involved submission of the quarterly reports on the achievements by the respective local authorities under contract and in the prescribed reporting format.

The submission of the fourth quarter report and the cumulative annual report on performance of the respective local authorities followed. The same formed the basis of evaluation and ranking of performance of the respective local authorities.

(c) Overcoming Obstacles

 c.      What were the main obstacles encountered? How were they overcome? No more than 500 words
At inception the major obstacles were pockets of resistance to the performance contracting exercise. There was apparent apathy among the technical staff. There was also lack of consolidated reference material to assist in establishing the status of service delivery. There was limited knowledge of the concept and its executing components. There were pockets of improper organization of evidence as to the achievements. These were overcome by provision and circulation of performance contracting guidelines, availability of secretariat staff to provide the necessary support and submission of feedback on the quarterly reports. Further guidance on the nature of evidence among other expectations on the elements of the performance contract were provided in conjunction with the planning unit of the parent ministry.

(d) Use of Resources

 d.      What resources were used for the initiative and what were its key benefits? In no more than 500 words, specify what were the financial, technical and human resources’ costs associated with this initiative. Describe how resources were mobilized
The resource structure in support of the initiative were three in nature; the financial resources whose costs can be established from the secretariat included funding from the local authority, transfer fund and any other funds allocated from the treasury. The technical and human resources include experts from the PCSC, the ministry of local government and the evaluation taskforce.

The financial resources were mobilized through task and revenue collection and distributed centrally to the respective local authorities. Technical and human resources were mobilized through centralized appointments by the PCSC secretariat

Sustainability and Transferability

  Is the initiative sustainable and transferable?
The performance contracting initiative in the local authorities is sustainable in its various components. In overall terms, its introduction has opened up a competitive face among the local authorities. This competition constitutes performance in terms of financial, social and economical, cultural, environmental, institutional and regulatory aspects. Excellence in performance not once but continuously stands to benefit in its sustenance through out the aforementioned elements.

Further, the linkage of sustained performance between these elements will guarantee improvement in one as against the other. The PCSC secretariat having come this far, has replicated the initiative up to almost 90% through out the public service at the national level. This serves as evidence of having taken on board more than critical mass in the public service. It is anticipated that the balance 10% will be covered in the year 2008.

Lessons Learned

 What are the impact of your initiative and the lessons learned?
The central lesson learnt is that strategic planning is a necessary tool in running the public service. Performance contracts are key to realization of overall objectives in the strategic plan.

Conclusively, the success in utilization of the two elements towards better public service is totally dependent on an effective and efficient secretariat.

In turn effective public service delivery benefits the diversity of social groups in any nation.

Contact Information

Institution Name:   The Performance Contracting Steering Committee
Institution Type:   Government Agency  
Contact Person:   Richard Ndubai
Title:   Secretary  
Telephone/ Fax:   +254-20-249009
Institution's / Project's Website:   +254-20-210192
E-mail:   endubai@yahoo.com  
Address:   P.O. Box 62345
Postal Code:   00200
City:   Nairobi
State/Province:   Nairobi
Country:   Kenya

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