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Russell Webster

Russell Webster

Criminal Justice & substance misuse expert and author of this blog.

What’s in the new probation contracts?

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The MoJ has decided to stick to its decision to make PbR payments on both binary (reducing the proportion of people who commit further offences) and frequency (reducing the total number of offences) measures. However, providers can only receive the frequency payment if they meet the binary target – the so called binary hurdle remains in place.

Payment mechanism design overview

Last week (10 February 2014) the MoJ published another batch of 29 documents relating to the new probation contracts. Amongst these was the latest information about the payment mechanism. This is not the final version – the document is called the “Payment Mechanism Design Overview” but does provide more information than we had before.

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Maximum Annual Payment

We already knew that there were two elements to the payment mechanism: Fee for Service (FFS) and Payment by Results (PbR):

  • The FFS is primarily paid for mandated activities that deliver the sentence of the court and licence conditions and includes Through the Gate services and Rehabilitation Activity Requirements.
  •  PbR is paid for “statistically significant reductions in reoffending against the historical baseline”.

 We now know that these two elements are related via the Maximum Annual Payment (MAP). The MAP is the total available funding in any year for a Contract Package Area. Providers will be required to bid a FFS for each year of the contract. The difference between the FFS bid and the MAP will form the basis of the amount available for PbR.

 It seems clear that those providers who bid a lower price for the FFS will have a better chance of winning the contracts. This seems sensible to me since they will have to deliver an effective service and reduce reoffending in order to make up the full value of the contract via PbR.

 The MoJ is requiring new providers to include a “learning curve discount” – effectively reducing the price every year, this has the effect of increasing the PbR proportion of the contract every year. The graphic below from the document is based on a MAP of £11m and a Maximum Biddable FFS of £10m:

MAP FFS

 Binary vs Frequency

The MoJ has decided to stick to its decision to make PbR payments on both binary (reducing the proportion of people who commit further offences) and frequency (reducing the total number of offences) measures. However, providers can only receive the frequency payment if they meet the binary target – the so called binary hurdle remains in place.

The new document gives the first indication of pricing for successfully reducing reoffending:

  •  The unit payment for achievement on the binary metric is £4,000 per offender who desists from reoffending.
  •  The unit payment for achievement on the frequency metric is £1,000 per reoffence avoided.

[Of course, these payments are only received if providers succeed in reducing reoffending past historical levels.]

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What else do we know?

The payment mechanism design overview does address a number of other key issues which all providers have been waiting to hear about and which are critical for the pricing of bids:

  • There will be a PbR bedding in period of between 6-9 months depending on when exactly the contracts start – the MoJ document envisages the start dates as being some time between October 2014 and July 2015.
  • The first year MAP will include funding from the MoJ for the “Voluntary Early Departure Scheme” – redundancies.
  • The baseline for reoffending rates will be for offenders starting community sentences or who were released from prison in 2011.
  • If providers fail to match existing reoffending rates, deductions will be made to the FFS they receive and they may have their contract terminated.

For those of you interested in the detail of the new payment mechanism, there is a further document (number 11) within the same batch of 29 documents which provides a full schedule and all the technical detail of the proposed new contracts.

 

Related posts you might like:

What did we learn from the Doncaster prison PbR reoffending pilot?

Sodexo and NACRO are the new partnership running the South Yorkshire Community Rehabilitation Company and it will be interesting to see whether they can have a positive impact on reducing the reoffending of released prisoners – their results will also be subject to a payment by results contracting approach, this time using both a binary and frequency (but not severity of offence) payment model.

Read More »

Disappointing outcomes for Peterborough and Doncaster prison PbR pilots

These are very disappointing results for the MoJ. Normally, there would be an expectation of a high level of performance from pilots with such public exposure where the partners had chosen to participate and, indeed, had championed and driven the initiative from the outset. Therefore, it is an extremely worrying sign for the new private providers of probation whose revenue will be, to an increasing extent, dependent on reducing reoffending rates, that these high-profile pilots are performing so poorly.

Read More »

Did Peterborough and Doncaster reoffending pilots succeed?

So what do we make of these results? To me they represent a mixed picture, there’s no denying that reoffending has been reduced. However, we would normally expect a high level of performance from such a high profile pilot where the partners had chosen to participate and indeed championed and driven the initiative from the outset. On the other hand, there has been significant learning about how best to co-ordinate pre-and post-release activity, use mentors effectively and co-ordinate a multi-agency approach to preventing reoffending.

Read More »
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All Probation Posts are sponsored by Unilink

With over 20 years’ experience in the criminal justice sector, Unilink is a world leader in probation and community corrections software applications, as well as prisoner self-service, prisoner/case management and prisoner communications. Unilink’s integrated suite of products provide a complete digital solution enabling efficient running of prisons and probation. Underpinned by biometrics it integrates seamlessly to deliver security, efficiency and value – while being proven to help rehabilitate prisoners.

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