Payment by Results

Payment by results in the public sector is being promoted by Government as an important plank in their programme for public service reform and greater efficiencies in funding those services. It is being rolled out by many departments – Department of Health, Department for Work and Pensions, Department for Communities and Local Government (DCLG), Ministry of Justice and others. Voluntary and community sector organisations are increasingly facing the challenges of this approach if bidding for funding for advice services, prevention of re-offending services or welfare to work programme sub-contracts. Now DCLG is to investigate how payment by results might be used in the housing related support sector.

Recognising that no system for this sector can be centrally imposed, DCLG is working with a number of local authorities, supporting them to pilot a range of possible payment by results models. These pilots are expected to run for two years and are to be independently evaluated.

The local authorities who have volunteered to be pilots are: Cheshire West & Cheshire, Derbyshire, Islington, Kent, Lewisham, Sheffield, Southend, Stockport and Torbay. Birmingham is also involved through a group of providers lead by Midland Heart

Sitra will be involved with the pilots and other providers to ensure that we learn from experience and address the issues and risks raised by this approach. Our objective is to promote positive outcomes for clients and for those outcomes to be determined by clients themselves.

We will regularly publish articles in the Sitra Bulletin on the development of payment by results by the pilots. These articles are available to download here.

Bulletin articles

Better joint working needed - Adam Knight-Markiegi (pdf) March/April 2012

Payment by results: the pilots - Neil Tryner and Dave Brown (pdf) February 2012

Measuring results - Glynis Sampey (pdf) December 2011

Whose results? - Glynis Sampey (pdf) October 2011

The rules of the game - Phil Saunders (pdf)
July/August 2011

Payment by Results pilots - Glynis Sampey (pdf)
June 2011

Payment by results - Glynis Sampey (pdf)
March 2011

What's new

Local Payment by Results

The Audit Commission published a briefing in April 2012 on payment by results (PbR) which considers the potential benefits for local authorities of using PbR, the risks involved and how to mitigate them. At a time when PbR is high on the political agenda, the briefing sets out to help councils understand what it entails, and whether it is right for their circumstances. As most schemes are at an early stage, the Commission has examined the issues that local commissioners should consider if they are to use PbR successfully, drawing on some national and international examples. The briefing can be downloaded here.

Social Impact Bonds to tackle multiple problems in a family setting

Nick Hurd, Minister for Civil Society announced on 26 August that four Social Impact Bond pilots will be launched in Hammersmith and Fulham, Westminster, Birmingham and Leicestershire. The Bond could raise up to £40 million tackle multiple problems in a family setting.

The new trial will build on a Social Impact Bond pilot to tackle reoffending in Peterborough Prison launched by the Ministry of Justice last September.

It is expected that the Social Impact Bond pilots will be funding intensive interventions from spring 2012.

More information can be found on the Cabinet Office website.

Social Impact Bond at HMP Peterborough

This report, published on 27 May 2011, is the first output of an independent evaluation of the Social Impact Bond (SIB) at HMP Peterborough, commissioned by the Ministry of Justice.

A SIB is a form of payment by results in which funding is obtained from private investors to pay for interventions to improve social outcomes. The Peterborough SIB, launched in September 2010, aims to reduce reoffending by prisoners who have served short custodial sentences.

Find out more and download the report

National Treatment Agency - Payment by Results for treatment outcomes

The National Treatment Agency (NTA) is supporting eight Payment by Results pilot schemes to develop and test new approaches to commissioning and delivery of drugs recovery systems that reward achievement of outcomes. Consultation on outcome definitions has been carried out. The pilots and an evaluation study are to start in autumn 2011. For further information see NTA website here