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Why the drug treatment sector must get on board with PbR

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Payment by results’ is an approach to funding public services which mirrors how we pay for a meal in a restaurant. We typically give a healthy tip if we like the food and service, but demand they take the cost off the bill if it’s not what we ordered, or the food is cold or defective in some other way. Organisations providing services under PbR will make a healthy premium if they reduce offending or drug use by more than the norm, but won’t get paid in full if they fail to reach their agreed outcomes.

From a Government point of view, it’s hard to see the downside of PbR – it transfers risk, draws in private investment and ensures that public funding programmes actually achieve their objectives (or the money stays in the Treasury). I’m reliably informed that the ‘big hitters’ in Government are particularly keen on PbR and you can see the evidence across different departments:

  • The £5 billion Work Programme is funded by PbR.
  • There are PbR pilots for Justice Reinvestment, reducing re-offending and cutting the number of nights young people spend in custody.
  • And of course there are eight drug and alcohol recovery PbR pilots.

There is a great deal of criticism of the PbR approach. Some of it is  ethical – Polly Toynbee and others see PbR as essentially a Trojan Horse for privatisation of public services. They are opposed to financial institutions making money out of Social Impact Bonds (like the one used to fund the One Project which provides a resettlement service to prisoners released from Peterborough Prison) and other financial instruments.

Some of the criticism is practical – commentators foresee a wide range of problems. They are concerned that providers will cherry pick the ‘easier’ clients with lower levels of need. They query whether it is possible to devise accurate outcome measures which are not overly complex and which don’t cost a fortune to monitor. They question whether PbR can really foster innovation when agencies are risking their future and the jobs of their staff. In fact, the more PbR contracts are developed, the more concerns emerge.

There have been a couple of recent posts which have been severely critical of payment by results. Huseyin Djemil criticised the proposed model of commissioning of residential rehab by PbR for involving a fundamental conflict of interests which he likened to a ‘gangmaster approach’. KathyGyngell, in a post for the Centre for Public Studies, criticised PbR in the public sector as ‘the worst of all worlds’.


But I want to argue that the drugs field must embrace PbR if it is serious in building a treatment system which is truly focused on recovery (and not just a re-branding exercise as Ryan Campbell discussed in a recent issue of Drink and Drug News).

Firstly, I think it’s important to be honest with ourselves – spending on drug treatment  has never been driven by the desire to help drug users. The first wave of investment in the mid-1980s was about halting the spread of HIV, the next big expansion in the early 2000s was about tackling drug-related crime. PbR will also drive money into the drug treatment field (particularly intensive treatment and aftercare) – but only if we can succeed in devising approaches that really help people become drug free, stop offending and re-build their lives by getting off benefits and (back) into work.

I’ve been a freelance consultant for over 15 years and in that time I have evaluated a least a dozen pilot projects which have been highly successful in turning round the lives of drug using offenders. When these pilots were rolled out nationally, their success was greatly diluted. One of the key factors driving down performance was a focus on narrowly defined activity targets – such as the numbers of assessments (the curse of Arrest Referral workers and CARAT teams) or programme commencements (DTTOs/DRRs).

PbR may have a lot of drawbacks, but its relentless focus on outcomes in the most brutal fashion (if you don’t meet them, you don’t get paid) should drive a treatment system that is really focused on helping people get off, and more importantly, stay off drugs.

PbR has great potential because of one key fact that keeps both Government Departments and providers honest – they both want to target the people with the most entrenched drug problems who cause the most damage to themselves and local communities. It’s obvious that Government wants to target the ‘hard cases’ because if they recover, they will produce the most savings to the justice, health and benefits systems. But the same is true for providers – the more prolific offenders they help, the more they will reduce ‘reconviction events’ and the more they will get paid. For once, we have a system with a built-in incentive for real effectiveness. It gives those of us who work in the drugs field and who have been advocating more investment in a holistic, long-term, recovery approach the chance to put our money where our mouth is.

Of course, just like when we go out for a restaurant meal, the proof of the pudding will be in the eating. Let’s hope the new treatment provision attracts plenty of Michelin stars and no providers get reported to the Food Standards Agency.

A version of this post first appeared as a ‘Soapbox’ article in Drink and Drugs News Magazine.



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