How has entering Payment by Results made Catch22 better able to understand and respond to ‘risk’ in the public service market

Fiona Sheil was responsible for co-ordinating NCVO’s programme of seminars, training and advice work on public service commissioning and procurement. Fiona left NCVO in October 2013 but we have retained her blog posts for reference.

Fran Pollard, Executive Director Business and Growth at Catch22 talks about how delivering Payment by Results has made Catch22 better able to understand and respond to risk in the public service market. Catch22 are a member of the NCVO Payment by Results Working Group.

Catch22 believe that with the right conditions we are capable of playing a much bigger role in delivering effective public services. We need to collaborate with providers and commissioners to help draw attention to, and resolve, barriers that will prevent us from doing this.  Our sector needs to be ready for delivering services in a different way, and prepared to lead, so that we can show commissioners that we have the expertise and financial models that they require.

We strongly believe that our services should be held accountable for the work that they do and that payment by results contracts for service providers are a very effective way of ensuring this.

We are delivering the first PbR contract of its kind in the UK prison sector at HMP Doncaster where we  deliver rehabilitation services both within the prison and, for the first time, ‘through the gate’ in the community.  We are delivering through a subcontract with Serco; it’s a first for the UK prison sector where 10% of Serco’s annual revenue will be contractually dependent on it achieving a five percentage point reduction in reconviction amongst offenders discharged from the prison in each year of the pilot.

If  this works, it would not only deliver significant cost savings to the Government in terms of the time and money spent on each offender by the police, the courts, probation and the NHS, but also much wider social benefit in terms of a potential reduction in crime. It is early days yet to say whether we are having the desired results but early intelligence suggests that levels of offender engagement have increased and the service is having a positive impact on offenders serving less than 12 months. This particular cohort does not currently receive ‘statutory’ support or supervision but has the highest re-offending rates of any group.

Catch22 is a prime provider of apprenticeships for the Skills Funding Agency and National Apprenticeships Service.  This contract is paid on the basis of keeping an apprentice aged 16-24 in an apprenticeship with an employer for 12 months. The Government is also interesting in improving completion rates, particularly for 16-18 year olds. In recent years, Catch22 have increased the number of young people/adults starting apprenticeships to 400 in 2012/13 and with completion rates of 80%.

Our learning from delivering this contract has been two-fold; firstly that performance management and review must be a dynamic process and involve multidisciplinary teams from operations and finance.  Secondly risk management plans must be updated on a regular basis and consider the implications of performance reviews.   The results from this must always be reflected in work programmes for the delivery teams and individual staff targets.  This also ensures that there is ownership of performance and risk management by every member of staff delivering the contract.

Being involved in these contract and other PbR contracts across our delivery areas has increased the need for effective performance and impact monitoring and reporting.  This can be very challenging given that PbR contracts aren’t always underpinned by good data and analysis.  This potentially exposes Catch22 to possibly significant financial risk and recent experiences with bids and tenders have further educated us in how critical managing this risk actually is.  There are the inevitable on-going internal discussions about cash flow management which has challenged senior management and trustees to think differently about investment.

Delivering PbR contracts has  provided a real management focus on delivery resources, essentially time and effort become targeted – this can only be a good things for organisations like our whose vision is to deliver public services more effectively and efficiently.   PbR delivery encourages innovation in that we are constantly striving to find solutions and models to impact on outcomes which provides a real focus on the end result.

Our innovative approaches to commercial solutions underpinned by effective data collection and analysis places us in a strong position to understand and respond to the inherent risk of PbR in the delivery of public service. Being at the forefront of PbR development with partners in the public and private sectors, at a time when Government have declared their intention to expand PbR to reduce costs and drive innovation places put us in strong position to grow in a challenging financial climate.

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