This briefing from Revolving Doors Agency highlights a number of challenges in applying ‘payment by results’ (PbR) approaches to services for some of the most excluded individuals in society, and raises a series of key considerations for commissioners and policymakers seeking a more outcome-focused approach.

It considers how a range of different PbR schemes have been applied to services working with individuals facing multiple and complex problems, including a combination of poor mental health, offending, substance misuse, and homelessness.

It highlights concerns that applying PbR approaches may drive a focus on short-term outcomes rather than long-term recovery, and lead to clients with more complex problems being ‘parked’ as providers target easier cases to achieve their results. 

Reflecting on the experience of a wide range of PbR schemes, including the Work Programme and ‘Supporting People’ PbR pilots, the briefing provides 18 key considerations for commissioners and policymakers who are looking to develop a more outcome-focused approach to funding services for this group. Considerations raised include:

• Involving service users in setting outcomes, ensuring the range of outcomes selected accurately reflects their priorities and needs
• Understanding the long-term investment required to support the recovery journey, and measuring ‘distance travelled’ rather than simply chasing short-term results.
• The need for appropriate pricing and resourcing, acknowledging that savings for this group come from effective, personalised and intensive support that can reduce the use of costly emergency and criminal justice services and promote long-term recovery, rather than processing people more effectively towards a single outcome.
• Taking a ‘whole system’ view, and pooling resources with partners around shared outcomes that enable funding of targeted interventions for this excluded client group.

The briefing concludes by urging caution in applying ‘payment by results’ to services for people facing multiple and complex needs, and recommends that commissioners and policymakers explore alternative ways of promoting a greater focus on outcomes, while learning from the varied experience of existing schemes.

The briefing is the latest in a series released through our SPARK project.