The use of non-financial performance indicators in the budgeting process of hybrids

In this chapter the use of non-financial performance indicators in the budgeting process in hybrid settings is discussed. Non-financial performance indicators are becoming more common and are considered to be important. To explore this use, two cases are discussed. The first analyzes whether municipalities use a different mix of non-financial performance indicators in their budgeting process when hybrids are contracted, the second how municipalities use performance indicators for controlling hybrid entities in the social domain. While from a normative perspective a high use of outcome indicators would be expected, we found that in daily practice a mix of performance indicators is used. In addition to outcome indicators, output and process indicators are requested as well, most likely because municipalities want to stay in arm’s-length control and need to have a hold on the budget. This shows how important it is to find out what information is needed from a user perspective in hybrid settings.