Payment by Results – the future of the criminal justice system?

| No responses | Posted by: Mhairi Aylott | Theme: Research, Social Innovation & Investment, Work with Communities

Payment by Results is already a hot topic – discussed everywhere from broadsheets to breakfast roundtables. Funding is being cut, services are being squeezed, yet still require delivery, possibly more now than ever. With prison costing the taxpayer over £3bn a year, and the Ministry of Justice needing to find savings of £2bn by 2014, the coalition government is pushing the payments by result agenda as part of their “rehabilitation revolution”. With the need for service delivery and improved value for money,  Mhairi Aylott discusses why it’s a topic worth pursuing.

Payment by Results (PBR) is an approach whereby service providers are held to account for the results achieved. It aims to improve efficiency, increase value for money, facilitate service choice and enable public sector innovation. Providers are paid for the outcomes they achieve which are contractually set by Government. In relation to criminal justice, this is namely a reduction in reoffending over a specific time period. Put bluntly if they hit the outcomes – payment is received, if they do not – no payment is received. This has obvious advantages – those who have a proven and successful approach in working with ex-offenders are able to have their services funded and commissioned, and they are given increased autonomy on how best to provide these services.
The PBR agenda has moved at great speed within the criminal justice setting – and as made clear by only a quick scan of our work on Social Impact Bonds. And already the pilot in Peterborough Prison is working with 3,000 individuals serving short term sentences. They will now be offered ‘through the gates’ resettlement support – usually those who serve a sentence of less than 12 months are subject to no statutory support upon leaving prison. If reoffending drops by 7.5% or more, savings from this reduction in reoffending (mainly from a reduction in the use of custody) will be repaid to investors.

A common complaint is that PBR is a largely untested area, yet here again matters are moving quickly. PBR mechanisms are now being piloted in both Leeds and Doncaster Prisons, and Wales, Staffordshire and West Midlands Probation Services are taking part in a four year trial to reduce reoffending. Financial Incentive Models have also been introduced in six pilot sites where authorities will be repaid a portion of the savings created from a reduction in demand on their criminal justice system. One of these pilot sites is the Association of Greater Manchester where the Young Foundation provided advisory support in the design and implementation of its new Transforming Justice programme. Importantly, it has been announced that the government’s Work Programme will specifically support ex offenders prior to and after leaving custody, helping them find employment and breaking the cycle of reoffending. This joined up model of service delivery incorporating (but not solely reliant on) a PBR element should be a welcome step and shows the development of the field.

However, Young Foundation work highlights that with the expansion of the agenda comes structural and measurement issues – quantifying the impact of one intervention on an ex-offender’s behaviour is not an easy one. Importantly, unlike Social Impact Bonds, PBR will not bring in new funding streams. Yet the approach will allow more analysis into what actually works to reduce reoffending, shining a light on the impact of both voluntary and private service providers, in both public and privately run prisons. Although difficult to predict what the field will look like in 10 or 20 years, it is apparent that the PBR agenda is being taken very seriously by the Government. However this current piloting phase should prove key in establishing what works, and ensure that promising approaches are replicated and rolled out. In the current age of austerity, the move towards justice reinvestment, service innovation and better outcomes for individuals and society must be welcomed.

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