Keep up-to-date with drugs and crime

The latest research, policy, practice and opinion on our criminal justice and drug & alcohol treatment systems

Payment by results: Calling in the auditors

Share This Post

The recent publication of the Audit Commission report: “Local payment by results” is a key landmark in the development of PbR for the commissioning of public services in the UK.

The great thing about the Audit Commission is that their focus on hard facts and real-life performance combined with their total independence means that whenever they bring their focus to bear on an aspect of public life, they are worth listening to.

There have been a number of landmark reports over the years which have focused attention on the core performance of public services – I have found the ones on youth crime and drug treatment particularly helpful, for identifying shortcomings in the overall approach.

For me, the timing of this report could not be better.

Starting next month, I am going to be running a series of video interviews with key figures within the PbR world.

The interviewees will be answering the same five questions, but from a wide range of different standpoints including providers: (public, private and voluntary); commissioners; financiers (hopefully) and researchers.

But these interviewees will all be giving opinions, so it’s great to set a factual context for PbR first.

Evidence base

Having said that the Audit Commission brings an authoritative, hard-edged perspective to PbR, it is slightly disappointing to report that they have reached the same conclusion as myself, albeit more categorically:

“Our review of UK and international research evidence found few rigorous evaluations of PbR and no complete, systematic analysis of its effectiveness.”

For this reason, the Audit Commission has not been able to pronounce for or against a PbR approach to commissioning public services.

However, the Commission has been more helpful than the stereotypical researcher whose first conclusion is always:

“You need more research.”

It has set out  five key principles which it says are critical to the establishment of any PbR initiatives – although it is very careful to state that the observance of these principles does:

“Not guarantee success.”

The five principles

The principles are:

  1. A clear purpose.
  2. A full understanding of the risks.
  3. A well-designed payment and reward structure.
  4. Sound financing for the whole scheme.
  5. Effective and robust measurement and evaluation.
The report explores these principles in some detail and I will be writing an extended post on each of them in turn over the next five weeks.
In the meantime, I strongly recommend that you find the time to read the report yourself and bear in mind its final words:
“Designing and delivering PbR schemes need extra care and diligence to manage the risks and deliver the benefits.”
Next week’s post will explore the first principle – defining a clear purpose.
It will look at whether it is possible to reconcile the four main objectives typically associated with PbR schemes:
  1. Improving outcomes,
  2. Reducing costs,
  3. Transferring financial risk, and
  4. Stimulating innovation.
Have a good week till next week


Share This Post

Related posts

Payment by Results
1st Commandment of Payment by Results: Thou shalt commission for a single purpose

1st Commandment of Payment by Results: Thou shalt commission for a single purpose. PbR schemes are often sabotaged by trying to achieve too many objectives. The Transforming Rehabilitation project is likely to suffer because it wants to reduce reoffending at the same time as cutting costs, transferring risk and privatising the probation service.

2 Responses

  1. PBR is another unrealistic unattainable idealets concentrate on getting the highest standard of care we can with short waiting time and cut the uneccessary bureacracy but mainly get rid of the diktat and ALL commisioners who basically dont have a clue #notimpressed

Leave a Reply

Your email address will not be published. Required fields are marked *


Get every blog post by email for free