Big bang – will Grayling’s payment by results 'rocket boosters' reduce reoffending rates?

The idea of outsourcing reoffending services and increasingly paying providers ‘by results’ is not new. The voluntary sector has provided rehabilitation services for over a century. Private providers have delivered rehabilitation services for decades, both in the UK and internationally. And contracting methods have evolved rapidly over the past twenty years, with the idea of paying providers only when they deliver a demonstrable fall in reoffending rates frequently raised in the 2000s. Labour’s last Justice Secretary Jack Straw kicked off the first pilots of PbR in reoffending services prior to the 2010 election. What is new about Chris Grayling’s announcement, however, is its ambition. Ken Clarke accelerated and built on the pilots started under Labour, with a range different approaches being tested across the country. But Grayling wants to shift to a full national PbR model by the end of this parliament. The results of various pilots are not yet in but the minister is confident: “from what I’ve seen so far I’m very encouraged that it does indeed work” (Radio 4, Today, 1:50:05). Indeed, he is confident enough to have cancelled a number of planned pilots to focus on developing the plan for national roll-out. Today Programme presenter Sarah Montague questioned the wisdom of expanding PbR before pilots had run their course and the decision certainly carries risks. First, there remain difficulties of attributing rises and falls in reoffending rates to provider efforts. While the first Ministry of Justice (MoJ) pilots could pay providers based on the results they got compared to areas where offenders weren’t getting the same support, this approach is clearly not as easy to apply when everyone is getting some form of ‘treatment’. Second, there are clear questions about the ability of Whitehall departments and/or Probation Trusts to successfully negotiate and oversee the contracts, given skills shortages. Third, there is the rather vital question of funding – or ‘cashability’. Grayling rightly critiqued a model that sees offenders get £46 and not much other help when leaving prison. But unless reduced reoffending translates to fewer people in prison none of the ‘savings’ of PbR can be cashed. Lower reoffending rates may reduce crime but we’ve had falling crime for over twenty years and yet the prison population has risen incessantly, as custodial sentences have become more common and longer. Fourth, there is the question of whether current providers of rehabilitation services will be able to cope with the increased workload. Grayling is encouraged by the fact that he has overseen the application of PbR in employment services contracts, known as the Work Programme. But the Work Programme followed a decade of large-scale outsourcing in employment services and a series of trials of different contracting models. Even then, it has not been without its difficulties, with many providers citing ‘teething problems’ as they have taken on new responsibilities. If there had been a short-term dip in performance while providers got up-to speed, this would not been surprising. Our research on the history of contracting in public services confirms that it takes time both for providers to adapt to their new responsibilities and for commissioners to refine their contracting and market oversight models. ‘Big bang’ approaches tend to require some refinement and, quite often, correction. Grayling hopes that these four problems are surmountable and presumably would rather see action now than abide the rather unsatisfying status quo for even a few months or years. Perhaps this is understandable. After all, our look at expansion and innovation of contracting models in a range of services over the past twenty years showed that without ministerial drive, very little happened. But, on the other hand, the plan clearly rests on a very positive view of both government and private and voluntary organisations’ ability to undergo and adapt to rapid change. Only time will tell whether this faith is justified – but it’s clear that both Chris Grayling and his departmental officials have their work cut out in the meantime.