PbR is increasingly common – and controversial
Everyone involved with the Work Programme knows that payment by results attracts a very negative press. This hasn’t stopped it from becoming an increasingly common commissioning model − in 2015, the National Audit Office identified 52 schemes containing an element of PbR in the UK, worth a total of £15 billion of public money.

The fact that PbR schemes have frequently been associated with very robust cost-cutting and/or the privatisation of previously public markets has caused considerable controversy and confusion which has enabled researchers to reach opposing conclusions about the same initiative.

For instance, those who saw the Work Programme as being primarily about helping long term unemployed people back to work with the least investment of public finances assessed it as successful — the Work Programme performed at the same level as the programmes preceding it, but was £41 million (2%) cheaper. Conversely, those who thought it was designed to get people with entrenched difficulties such as disability or addiction into work, concluded that it failed.

Does PbR work?
The evidence base on PbR is inconclusive; schemes are so varied, tend to be commissioned for such different reasons (to improve outcomes and/or stimulate innovation; to reduce costs, to transfer risk from government or commissioners, to encourage new markets), and are so often poorly evaluated, that it is not yet possible to pass judgement on whether the PbR model works.

There are a number of examples of positive PbR schemes in this and other countries. There are, probably, even more examples of badly designed PbR schemes which have failed.
However, it is now possible to identify a number of key factors linked to the success of PbR schemes – and even more that are linked to schemes that fail.

Making sense of PbR
To help commissioners, investors and providers think through these key factors, I have developed an interactive PbR tool. Funded by the Oak Foundation, the tool asks key questions on both the rationale for using PbR for a particular service and key elements of the contract such as defining and validating outcomes and guarding against common PbR problems such as “creaming and parking” and unintended consequences.

The tool gives you immediate feedback on your choices, followed up by summaries of key research. Everything is evidence-based and the tool is completely free to use – you don’t even have to register.

When you’ve completed the tool, you get to download all your answers and additional PbR resources.

You can find the tool at: www.PbR.russellwebster.com

You are very welcome to embed it on your organisation’s website to encourage your staff and clients to use it.

Hopefully, we can end up with a more informed debate on payment by results.

Russell Webster is an independent consultant specialising in the fields of drugs, crime and payment by results. You can find Russell’s free, regularly updated PbR Resource Pack here.