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What’s the future for payment by results?

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.

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What’s been happening with payment by results?

Payment by Results was initially introduced by the last Labour government and was enthusiastically championed by the Treasury at the start of the current government.

A quick search of the manifestoes shows that the Conservatives are still very keen – PbR gets three mentions,

Labour and the Lib Dems are apparently not so enamoured– not a single mention of PbR in their pitches to the electorate.

(I’m afraid I couldn’t brig myself to download the UKIP manifesto.)

Elsewhere, the evidence appears to be contradictory.

  • On the one hand, PbR is entrenched in very large national programmes such as the Work Programme and the new probation contracts.
  • The interim evaluation of the drug and alcohol PbR pilots was mainly negative and we are still waiting for the final evaluation which should have been published last month (April 2015).
  • Despite this, the most recent Drugscope State of the Sector report found that PbR was an increasingly common component of drug and alcohol treatment contracts.
  • The Department for International Development is also very keen on making foreign aid increasingly contingent on a PbR approach.
  • Recently (23 April 2015) a new PbR pilot was announced focusing on the successful resettlement of young offenders from four YOIs


The evidence base

We still lack a proper evidence base to enable us to assess whether PbR can be an effective approach to the commissioning of public services. A number of recent evaluations come to the broadly similar conclusion that PbR can often be helpful in the way that it focuses the minds of both Commissioners and providers and allows for more innovation, or at least, the imperative to deliver best practice.

However, the same evaluations also tend to point out that PbR can be very labour intensive with considerable time and resources being spent on constructing and measuring indicators, rather than delivering services.


Where do you think PbR is going?

My main reason for writing this post is to get some feedback from regular readers about where you think PbR is going?

My sense is that there is still an, almost unspoken, expectation for many commissioners to adopt at least a partial PbR approach to their commissioning in a wide range of social care fields including: worklessness, homelessness, reducing reoffending and substance misuse.

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.

I’ve also recently heard about a number of novel applications of PbR.

My favourite of these is a local authority which is thinking about commissioning external consultants to review their personalised social care budget.

In a engagingly/surprisingly/frighteningly blunt approach, I understand that the consultants will be asked to assess the appropriateness and value for money of expenditure in individual cases. Where funds are thought to have been inappropriately spent, the savings are to be divvied up equally – that is to say the consultants will keep half of the savings through an incentivised PbR approach and the other half will be returned to the overall social care budget.

If you know anything about this scheme or any other novel PbR approaches, please get in touch – either via the comments section below, or by getting in touch with me direct.


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