2012 May - Payment by Results

But is it SIBable?

Full report available here.
London’s funders learned a new word on 3 May when Payment by Results (PbR) was the topic for a London Funders meeting. Debbie Pippard, Head of Programmes at Barrow Cadbury Trust and chair of this meeting, pointed out that whilst much of the discussion of PbR has been focused on the “PbR-heavy” end of the spectrum - no results, no pay – which has caused much alarm amongst smaller and local voluntary and community groups, there are plenty of alternative models where risk is shared or fully borne by investors. The meeting went on to explore these and hear of current examples (like the Peterborough Social Impact Bond and hence the discussion of “SIBability”). In a couple of hours the group made great progress in exploring the many issues associated with the topic including how PbR fits with political and financial cycles, timescale, distortion of intentions and more. Many positive possibilities were identified for funders focusing on outcomes and impact and especially where early action and preventative work are the real goal.

Ben Jupp, Director of Social Finance, gave a detailed overview of the pros and cons associated with PbR, drawing on his long-term involvement in the subject. Eileen McMullan, Commissioning Manager, Supporting People, London Borough of Islington, provided a case study of Islington's trial PbR programme which is overlaid as a virtual payment system over a more conventional approach so that Islington and its service providers can try out some risk-free learning, especially about allocating monetary value to weighted outcomes in work that is being done with service users who have complex needs. 
 
Funders round the table were keen to share their experiences of PbR. A fuller report of this meeting will be published shortly. Out thanks to Buzzacott for hosting the meeting.

Below is a just a selection of some of the literature available on Payment by Results. Although it is too early for an analysis of the effectiveness of PbR, there is mounting evidence of the principles needed to maximise the chance of success.

Publications
Local payment by results
Audit Commission, 2012
Good overview of risks and accountability including understanding the extent to which risk is transferred and how much more expert knowledge is demanded of commissioners. Sets out issues, rather than making recommendations for commissioners. The success of delivering PbR locally will vary according to local context and priorities but favourable characteristics (such as means to measure baseline performance and future changes, delivering at competitive prices) suggest infrastructure is vital

Mental health payment by results readiness review
Mental Health Network, NHS Confederation, 2011
PbR is a familiar approach in mental health services. The report provides an assessment of commissioners’ and providers’ readiness to deliver the Department of Health policy commitment that adult mental health PbR “currencies” should be used for commissioning and reimbursement from April 2012. Local practitioners express the need for better support from the Department to improve their effectiveness.

Payment by results guide (Public Services)
NCVO, 2012
With information on transparency and impact, this is a useful starting point to understanding the purpose of PbR and how it has developed so far within local authorities, Department for Education, Ministry of Justice etc.

Payment by results and social investment, briefing from NCVYS
National Council for Voluntary Youth Services, 2011
Clear and thorough overview of PbR in the context of the trend towards outcomes-based commissioning and how it relates to areas like rehabilitation and drug recovery. In is particularly useful in highlighting the issues for VCS organisations in delivering PbR.

Payment by results: calling in the auditors
Russell Webster, 2012
This is one of a series of documents and blogs on the website of an independent consultant who also provides links to government material and research results on PbR, especially in relation to its use in tackling crime and drug use. Champions systematic analysis of the effectiveness of PbR.

Payment by results: opportunities and challenges for improving outcomes for children
NSPCC Strategy Unit briefing, 2012
Good overview of the challenges posed by PbR  and considerations for commissioners of children’s services (positive outcomes for children, providing working capital to smaller providers etc.). Includes detailed overview, including specific examples, of outcome-based contracts and Social Impact Bonds.

Payment by results: the perfect storm of public sector finances
LGIU, 2011
Report which argues that there exists potential for a further, transformative level of innovation if councils  can be more involved in preventative measures around services that are normally delivered by central government.

Comment pieces
Leeds Prison set to introduce payment by results model
No Offence!, 2012

Is payment by results compatible with the big society?
Philip Kirkpatrick, Bates Wells and Braithwaite, 2012 

Payment by results is no panacea 
Andrew Neilson, Howard League of Penal Reform (2012)

The dangers of Payment by results
Dan Corry, New Philanthropy Capital, 2012

Delivering drugs and alcohol recovery bulletin
Department of Health online bulletin for the Payment by Results for Recovery Pilot Programme. Includes information on an event on 21 May for treatment providers who are interested in finding out more about the programme.