Public sector commissioning is changing rapidly
Times of change A recent (9 April 2015) report from New Philanthropy Capital – “Times of Change” – is an excellent short summary of the main
20th May 2015
Here you can find over 150 posts tracking every major development in payment by results since 2011. You can see where PbR has succeeded and, more frequently, where it has failed across a wide range of sectors: offending, welfare, employment, substance misuse… If you’re looking for something in particular, try the search box below.
Times of change A recent (9 April 2015) report from New Philanthropy Capital – “Times of Change” – is an excellent short summary of the main
Perhaps the most depressing finding of the survey, was that the majority of the sector has had to make redundancies with 50 organisations expecting to make 131 redundancies in the current financial year. Some of these job losses are being offset by the recruitment of more volunteers. In fact, the voluntary sector is again starting to resemble the volunteering sector with organisations having on average 1.7 volunteers for every member of paid staff.
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.
In my experience, many commissioners are very proud to announce that they are adopting a PbR based contracting system, while just as many are somewhat sheepish about the need to include some element of PbR because it is seen as contributing in some way to the need to reduce commissioning budgets.
The PbR model appears to be incentivising delivery as intended and there is no evidence of perverse incentives. The ethos of the provider organisations means that they are both committed to continuing support for those who remain on the streets.
Some reported that PbR created opportunities for increased creativity and flexibility in the way in which services were designed and delivered. PbR had also encouraged a greater emphasis on monitoring and reviewing the progress of those in treatment. However the emphasis on measuring progress solely in terms of the PbR outcomes was both extremely costly and time-consuming but also had the potential to alter and
We have to join up commissioning much better for this last group of people. So, should a homeless, unemployed drug dependent offender have one provider to deal with all their problems in the round, or separate providers (all specialists) responsible for each End Result? Reform suggests two possible solutions:
The idea is to let public services work like any other market with consumer choice meaning that the best services get to be market leaders and the market changes over time. To achieve this, Reform suggest doing away with the cumbersome procurement approach and introduce a licensing approach with these key features:
Following a balanced and coherent examination of these key difficulties based on the real life application of PbR in the UK through the various homeless, workless, offending and troubled families initiatives, the Revolving Doors report comes to five principal conclusions:
Disappointingly, and somewhat bizarrely, the evaluation was not able to provide information on the core outcome of whether released prisoners were helped to find work by the Work Programme, apparently because the DWP did not require providers to provide separate statistics for this group.
Reform argues that the current system does not encourage innovation or quality. Whether provision is public or private it is typically a local monopoly with limited or no incentives to improve performance. Too often national and local commissioners prioritise price over effectiveness.
As we have come to expect, there are significant benefits to the SIB approach but also some serious challenges. Most stakeholders involved in SIBs, especially service providers, had a positive experience to the extent that most see themselves as likely to be involved in delivering Social Impact Bonds in the future. The Payment by Results approach places an intense focus on outcomes and greater impact for beneficiaries.
