Posted: 21 February 2012

Payment by Results in the children and families sector

A common aim – to improve outcomes for children and families

A common aim of voluntary and community sector organisations that provide services to children and families is to improve their outcomes and life chances. However, the methods of delivering services in order to achieve those positive outcomes vary. There is always a wide range of opinions on what works, with which service users, and in what settings.

Payment by Results and public service reform

One model of delivering services to children and families is Payment by Results (PbR). PbR aims to incentivise organisations like ours to find innovative ways of delivering services that work best for the children and families they work with. It does this by linking funding for the service to the positive outcomes achieved. Payment is withheld or withdrawn upon failure to improve outcomes.

PbR has grown in prominence over the past decade, firstly as one component of a broader outcomes-focused model known as Outcomes Based Commissioning (OBC), and more recently through its role as a key part of the coalition government’s public service reform agenda.

Since 2010, as a result of PbR being placed at the heart of public service reform, the voluntary and community sector has been actively engaging in understanding when, how and with whom, PbR can be used to improve outcomes for children and families.

Today The Children’s Society, in partnership with the Family and Parenting Institute, has launched a paper that explores:

  • the experience to date in the family sector 
  • the main issues and opportunities that have arisen from this experience
  • recommendations for how the voluntary and community sector moves forward as an active, but challenging, partner in the PbR agenda.

Much of the content of this paper was gathered during a roundtable discussion involving practitioners, civil servants, local government officials, private sector providers and academics, all with working experience of using PbR to deliver services.

Issues and opportunities

What we heard is that experience in practice has thrown up a wide range of issues. For example, poorly specified outcomes have resulted in ‘cherry-picking’ of users. This means that the hardest-to-reach families, often those most in need of support, do not receive a service.

Also, with payment on results meaning later receipt of funding, some organisations have struggled to fund services up-front. As a result they have had to use reserves to cover short-term costs, putting them in a weaker financial position. 

However, this practical experience has also highlighted the opportunities. Experience has shown that the recording of work with children and families can improve. This allows for more effective information sharing between the local services with whom the users come into contact, which should lead to a more personalised approach to providing services.

The ‘winners’ must be children and families

First and foremost the ‘winners’ from this new reform agenda must be children and families, and ultimately services must be delivered in a way which achieves the best outcomes. PbR is one way of achieving this but only when used in the right settings; it is not on its own a ‘silver bullet’.

The voluntary and community sector must engage with the PbR agenda in an active, but challenging way and raise concerns with a co-ordinated voice. This will make sure reforms work to improve outcomes for children and families, the sector’s common aim.

By David Hounsell, Economic Adviser


By David Hounsell - Policy team

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