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Payment by results and complex needs

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:

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Adding value?

The Revolving Doors Agency has just published (5 February 2015) an intriguing and extremely valuable new briefing which examines the impact of payment by results on commissioning services for individuals with complex needs.

As regular readers may know, I’m an advocate of PbR in principle but have formed the view that it is only appropriate when outcomes are very clear and their measurement is simple and straightforward (see my Ten Commandments of PbR).

It appears that @revdoors had similar concerns about the recent proliferation of PbR schemes aimed at tackling entrenched social problems and so, rather than just complaining, set out to examine the issue in detail by means of a series of stakeholder roundtable discussions and a literature review.


Central challenges

The report identifies and wrestles with two key challenges in an exploration of whether the key benefits of PbR – a focus on outcomes and provider flexibility and innovation – can be reconciled with its main downsides – expensive and complex monitoring schemes and a vulnerability to providers gaming the payment system.

The first challenge is how to co-ordinate commissioning and outcomes for people with complex needs. PbR works best with simple, easy to measure outcomes but a homeless, drug dependent offender needs to have stable accommodation and become drug free in order to stop offending. Different providers still too often receive different pots of money to work towards different outcomes with the same clients. This can make for very confusing and expensive provision and arguments over which intervention achieved a certain outcome.

The second challenge is how to focus on the long term recovery of this client group. PbR is helpful in the way it focuses on outcomes but providers have to be paid so most schemes dilute PbR by paying a Fee for Service (as in the new probation contracts) or when a client engages in service (the Work Programme’s attachment fees) and typically set PbR outcomes of 12-18 months maximum. As anyone working with this client group knows, it can take considerably longer to achieve and maintain positive change.



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:

  1. Involving service users in service design can ensure that the most appropriate outcomes and measurements are set.
  2. Recognising the long term nature of recovery and considering measuring “distance travelled” rather than chasing short term results is important.
  3. Getting the price and resourcing right is critical.
  4. There is great potential in pooling resources which allows the leveraging of additional funding so that interventions can be tailored more closely to individual need.
  5. Recognising that PbR is only one approach and will often not be the most appropriate commissioning model.

The report is short and focused and well-worth a proper read.

Please share your views on whether PbR is a good commissioning model for services for people with complex needs via the comments section below.

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One Response

  1. My comment to you about PbR is the lack of statistical analysis which demonstrates that there is a connection between the two aspect of work ie Birmingham Support People Project 2013 and the outcomes.

    If people are going to claim that PbR work then an external statistical analysis needs to be completed. I have been to too many conferences were excellent outcomes were related to small groups of under 40 people, which is not statistically significant

    The reality is that all of these intervention have some validity and value but nothing which demonstrates that they are statistically significant. I recall a study of Homeless Link Outcome Star, useful tool but demonstrated no statistical significance in terms of outcomes.

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