Payment By Results

In its Transforming Rehabilitation consultation document (January 2013), the Government outlined its vision to develop a Payment by Results (PbR) offender rehabilitation market, where private and voluntary sector providers would compete for nationally commissioned contracts to manage offenders in the community, with the financial rewards linked to achieving the outcome of reduced reoffending rates.

Whilst  PCA can see the merit behind the general concept of PbR, we have strong concerns that the financial risks associated with this model would effectively exclude Probation Trusts from competing with the private and voluntary sector for any new PbR contracts, due to Treasury rules against public sector bodies undertaking financial risk onto their books.

The PCA would also question the Government’s current proposal to have a single ‘binary’ measure for results – that is, success or failure is defined solely by reducing overall reoffending rates amongst a cohort of offenders managed by the contractee. The probation and rehabilitation of offenders are complex services, requiring the tailoring of multiple interventions to specific offender needs and joined up, multi-agency partnership work. ‘Success’ can be mesaured by numerous factors, differing levels and often should be attributed to the services of multiple agencies.

Furthermore there are risks over creating perverse incentives, where for example PbR providers will ‘cherry pick’ and only invest in those cases which are calculated to have a higher than average chance of success in reaching the PbR target set. This could lead to neglect of the most challenging and difficult to solve cases. The design of any future PbR contracts would have to carefully mitigate these risks.

At the end of 2012, the Government suspended two PbR probation pilot schemes which were in development in Staffordshire & West Midlands and Wales. We would strongly urge that the Government evaluates the evidence collected from PbR pilots, before applying these principles and methodology more widely across probation.

The PCA Payment by Results policy portfolio group is led by Stuart MacDonald, ACO at Norfolk & Suffolk Probation Trust. The aims of this group are:

  • To increase the capability across the Probation community to engage in the competitions for probation services anticipated as a result of the Transforming Rehabilitation implementation
  • To co-ordinate responses on behalf of the PCA to national initiatives or developments e.g. Payment by Results (PbR) and the NOMS (MoJ) competition approach and  timetable and to seek to influence and shape strategic thinking by Probation in relation to such initiatives or developments
  • To share knowledge about the implications of PbR in the competitive procurement process
  • To understand the issues that Probation leaders will face in developing “mutuals” and to share knowledge on their development.

For queries and contributions to the PCA’s PbR policy portfolio, please contact the leads.

RECENT ACTIONS

-At the PCA annual conference in March 2013, Russel Webster and Stuart MacDonald held a workshop examining PbR in light of the ‘Transforming Rehabilitation’ reform proposals. The PowerPoint presentations can be found here

-In February 2013, the PCA held a roundtable seminar exploring the PbR issues surrounding the ‘Transforming Rehabilitation’ reforms. The seminar included input from the MoJ, Cabinet Office, leading think tanks and Probation Trusts.

-The PCA’s general views on PbR and the Transforming Rehabilitation reforms can be found in our response to the Government’s consultation here.