Wednesday, 27 February 2013

The Tide is Turning

Which ever way you look, the tide seems to be turning rapidly on that wonder panacea for delivering public services called Payment by Results. Well I say everywhere. Not the vast industry that's sprung up, keen to separate the government from vast sums of taxpayers money obviously. Having made a mint from the Work Programme, they are very keen for it to expand into new areas such as probation and it just remains for the easily-led politicians to be convinced that the idea is basically crap.

I said a couple of days ago that if aspirational senior civil servants wished to advance their careers, they'd do well to find another way of delivering the Rehabilitation Revolution. The trick of course is to find a way of doing it that both extricates their hapless ministers from a corner they've painted themselves into and that looks like a better solution.

The really skillful will give it the illusion of offering even better value for money, greater protection for the public, all whilst delivering an improved service. Obviously not a u-turn, but evidence of a highly thoughtful politician who responds to constructive alternative ideas. Well the scene is being set because here we have an insight into what those very influential civil servants think of PbR over at the Treasury and Cabinet Office. The guys who control the money and the political direction of travel. I think the piece on the Public Service website is worth quoting in full:- 

Whitehall cooling on payment by results

22 February 2013 
Central government's enthusiasm for commissioning public service delivery through payment by results contracts is cooling, according to senior figures at the Treasury and the Cabinet Office.

The National Audit Office's annual conference heard that there was growing scepticism over whether the tariff-based mechanism could deliver the efficiency savings ministers envisaged.

The Ministry of Justice recently adopted it for probation services delivered through external providers. The Depart­ment for Work and Pensions is also using the system within its Work Pro­gramme, despite controversy over data manipulation by one of the largest contractors.

Katharine Davidson, executive director for strategy at the Cabinet Office's Efficiency and Reform Group, told delegates: "We were very bullish on payment by results contracts at the start, (but) the more we know about the quality of the input information and the inability to link it to outcomes, we in the ERG have taken a more measured view of them.

"Payment by results will only work if you have a really good grasp of the results, but we have focused almost entirely on inputs and even that has not gone far enough."

Sharon White, the director general for public services at the Treasury, also expressed doubts about the system.
White said: "We take a pragmatic view of whether payment by results works. It is quite hard to get a firm handle on the numbers.

"We have now got a situation at the Ministry of Justice where Chris Grayling… is going to take a payment by results approach to almost the whole of probation. But some of us who have been around a long time get very nervous about panaceas."

She added: "We're taking a very cautious approach on whether this is going to deliver better value for money compared to direct public spending intervention."

If that wasn't bad enough, just look what Liz Calderbank, HM Chief Inspector of Probation thinks of PbR and risk in her general response to the consultation:-

"The interface between the dynamic management of risk of harm and the PbR model, 
with its focus on reducing reoffending, in our view creates an inherent tension. We 
do not believe that this tension can be successfully managed within the framework 
proposed. Any lack of contractual or operational clarity between the public and 
private sector providers will, in our view, lead to systemic failure and an increased 
risk to the public. The need for clarity about roles and responsibilities is a key issue 
in the management of risk, as was demonstrated by our investigation into the cases 
of Hanson and White in 2006."

Her forthright letter is a clear warning about the risks involved and serves to add significant weight to a very similar view expressed by the union and professional body NAPO. It will be very interesting indeed to see what Mr Grayling has to say when he appears before the House of Commons Select Committee later this morning.

Sign the petition here.


  1. Having just watched Graying at the Justice Committee I did not get any sense that the tide is turning. He wants the management expertise of the private sector, the mentoring skills of the third sector and the public protection skills of a rump probation service. He referred many times to the 40% reduction in costs achieved through the outsourcing of community service in London. The ideology is intransigent, any adjustments will be technocratic. He doesn't expect quick reductions in reoffending, but his direction of travel will model what he did with the employment services. He is well-informed and seems determined to leave his fingerprints.

  2. I haven't watched his performance yet, but the 40% saving on the London CP programme is pure fiction according to CEO Heather Munro. Politics is a funny old business and a lot can happen before any key decisions are done and dusted.

  3. Time will tell, and politics is a funny old business, and sometimes there are changes of direction - on prison privatisation for example. But from Carter onwards all I see is the slow demise of a public probation service. I don't think it matters if the 40% is fiction - if Grayling wants that in his narrative there it will stay. I have thought over the years that there has been a pollyanna attitude to threats to probation, somehow the attitude that things can't really turn out in line with the worst scenario - but I see no cause for optimism over the past ten years. I think in probation staff are beginning to see that the end is nigh.