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Payment by Results

Whether to use payment by results? (NAO 2)

Are the NAO’s features a copper-bottomed guarantee of an effective PbR scheme? Or are you more in agreement with me that the attraction of PbR is the chance to move away from the straight-jacket of contemporary procurement and stimulate fresh approaches, under-written by the knowledge that if a provider fails, the commissioner doesn’t have to pay?

Commissioning

An inflexible commissioning system

Another consequence of these lengthy monolithic contracts is that it is very difficult for governments to change policy direction. Reform makes the point that to implement change a new government will often have to compensate existing providers and institute new, lengthy and expensive procurement processes. Although old providers may get some compensation, all potential

Commissioning

Price setting in public markets

Reform argues that there is a bell curve to innovation. When prices are set too high, providers make easy profits and public money is wasted. But setting prices aggressively low means that new providers are unable to innovate and tend to focus on easy to achieve results, which might not even have required a government funded intervention in the first place.

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