Supplementary written evidence from Nacro
(PB 69)
INTRODUCTION
Nacro is the UK's largest crime reduction charity,
with over 40 years experience of working with offenders and those
at risk of crime. We run over 300 service delivery projects in
communities across England and Wales and, last year, around 90,000
people benefited from their contact with Nacro. Our services include:
prevention and early intervention for young people; education,
training and employment for prisoners and offenders in the community;
and resettlement services (including accommodation) for those
on release from custody. Nacro Community Enterprises is a Registered
Social Landlord.
Nacro is pleased to contribute to the Select Committee's
Enquiry into the role of the Probation Service. This submission
follows the Committee's request for supplementary evidence and
is in addition to the submission we made to the Select Committee
in November 2010.
What are the relative merits of payment by results
and place-based budgeting models as means to encourage local statutory
partnerships and other agencies to reduce re-offending? What can
be learnt from the implementation of payment by results models
in health and welfare reform? What results should determine payment
in applying such a model to criminal justice?
In our view, the key features and merits of payment
by results are as follows:
(i) It is difficult to argue against the notion
of paying providers for the outcomes they achieve. If they don't
produce the right results, they don't get paid. Payment by Results
has the potential to bring simplicity into an inherently complex
world. In the criminal justice world this requires that local
commissioners, who share an investment in the outcomes they wish
to achieve, focus their attention on what is achieved, leaving
the provider to determine how best to achieve it. To win work
and get paid down the line, the provider will have to have programmes
in place which they believe, based on evidence, will bring about
the right outcomes. This means having all the right components
in the right combination, to the right level of intensity, to
match the risks and needs of a particular offender cohort. It
also means having the right organisations taking part.
This focus on outcomes—reducing
crime, reducing reoffending, securing jobs, securing safe accommodation—puts
partnership working on a new footing. Those investing in the service
and those providing it have to work together to define
the outcomes, making certain these are both realistic and measurable
and that they match offender's risks and needs.
(ii) We foresee an extension to the concept of
competitive dialogue between commissioners and providers, where
less reliance is made on the detailed tender specification in
favour of robust due diligence arrangements. In this situation,
those procuring the service would engage with potential providers
in terms of who they are, what they do, what they stand for, and
more importantly, what they have actually achieved to date. As
in the business world, investors would intervene locally, getting
involved to turn a situation around, ensuring the focus stays
on the outcomes. They would provide help and support, without
becoming preoccupied with managing the service themselves.
(iii) Under payment by results, providers would
have the freedom to develop new and innovative partnerships. The
onus is on them to develop strong, coherent strategic and delivery
arrangements which stand up to rigorous scrutiny. Here, the constituent
organisations will have worked out the unique contribution they
each make to the partnership overall and how they will strengthen
the delivery, enhance reach and build credibility, while complementing
each other's brand.
(iv) Payment by Results provides a way forward
for new thinking and innovation. This has been shown in the Peterborough
Social Impact Bond pilot, where bright new partners have been
brought to the table, including those who would otherwise not
have been involved in tackling reoffending.
(v) We believe that under Payment by Results,
the delivery landscape may change. There are few charities who
could immediately take on the business and financial risks of
Payment by Results on their own. If, as is envisaged, Payment
by Results paves the way for longer term contracts with larger
volumes of offenders, we are likely to see charities joining up
with other like-minded organisations via joint ventures and special
purpose vehicles or becoming involved in mergers and acquisitions.
(vi) Payment by Results lends itself to locality
based thinking. Reducing reoffending in a particular location
is never the sole reserve of one department or agency. Neither
does it rest with the statutory sector. Our experience is borne
out by evidence that the more the non-offending community—community
groups, employers, social enterprises - is involved, the more
chance there is of reducing crime and reoffending. In order to
define and deliver measurable outcomes, targets have to be confined
within clear and measurable boundaries as is the case with the
Peterborough Social Impact Bond.
LESSONS FROM
HEALTH
(i) We are aware that in recent years the Department
of Health has made progress in relation to Payment by Results,
particularly in fields of acute surgery. However, it has yet to
make this work in more complex areas such as mental health. Whereas
it is feasible to set a national price-per-operation with, for
example, hip replacements, this is less straight forward when
it comes to psychiatric treatment. Likewise, in the sphere of
criminal justice, it will take time to get the funding mechanisms
right. We believe pilots and pathfinders will inevitably play
their part here. We welcome the suggestion in the Breaking the
Cycle Green Paper that the move towards Payment by Results is
brought in incrementally and is seen as a journey from activity
based funding through market testing, to notions of transferring
risk to suppliers, and on to payment in exchange for outcomes.
(ii) One of the challenges is to consider the
"level" at which commissioning takes place. We envisage
a variable geometry where some contracts are handled locally whereas
other large scale opportunities are commissioned nationally. Against
this backdrop, it is important that work is done to ensure the
right balance between a national framework (to avoid postcode
lotteries) and localism.
(iii) Most of the payment by results experience
to date in health appears to be in areas where personal choice
is the dominant policy. Personalisation and service user involvement
is still in its infancy in the criminal justice system and we
would welcome any impetus Payment by Results could provide in
determining how personalisation might play a more dominant role
in criminal justice going forward.
RESULTS DETERMINING
PAYMENT
(i) Tackling reoffending will always require
a patchwork of interventions from, preventative to rehabilitative,
big and small, national and local, intensive and generic, covering
different levels of risk and different types of need. Some of
these will lend themselves to payment by results more than others.
It is therefore crucial that standardised tools are used to define
levels of risk and need so that the right interventions are used
for the right cohort of offenders. Reoffending outcomes that can
be achieved with one set of offenders might be markedly different
from outcomes with another cohort.
(ii) The ultimate key to success with Payment
by Results is the extent to which more than one social outcome
can be achieved with the same set of interventions. For instance,
programmes delivered by Nacro might set out simultaneously to
reduce reoffending, get offenders into sustainable employment,
and relieve homelessness.
(iii) In line with this, there is a need for
improved systems to track long term gains to verify improvements
over time because short-term gains will not satisfy the public
of the programme benefits. We are aware that the Government is
looking to introduce Payment by Results in respect of drug treatment.
In view of the correlation between drug misuse and offending,
any such development will be highly relevant to the reduction
of reoffending.
January 2011
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