Payment by results is designed to offer Supporting People providers an incentive to improve services for clients. Rhiannon Bury kicks off our care and support special by finding out how the pilots are doing so far.
Ready… aim… fire. It has been just over a year since Lorraine Regan, then head of strategy and policy for Supporting People at the Communities and Local Government department, announced that 10 council areas would be testing a payment system that links money to results for theircare service.
The aptly named ‘payment by results’ scheme for Supporting People funding was introduced in the pilot areas – Kent, Lewisham, Islington, West Chester and Cheshire, Sheffield, Southend, Stockport, Derbyshire, Torbay and a consortium of housing providers in the west Midlands working with Birmingham Council – last June. It is all part of a government experiment to work out how best to spend the annual £1.6 billion Supporting People budget.
Each local authority was given £10,000 by the CLG to get the pilots up and running. The plan was to test an 80/20 payment system, where 80 per cent of the contract value was paid up front, with the remaining 20 per cent paid when previously agreed outcomes were met.
The government hopes that this will ensure delivering care that is focused on achieving clients’ individual targets, for example, helping them to be more independent or improving their skills.
The theory is that if there is money tied to particular goals, there is more likelihood that the goals will be met. By allowing each pilot to agree outcomes with providers, the scheme can be tailored to each organisation.
But some providers are concerned about their ability to deliver services if the delayed payment leaves them with cash flow problems. Others say that, coupled with the fact that most local authorities’ SP budgets have been cut – in some cases by as much as 40 per cent – the proposed system would leave councils and SP providers struggling to make ends meet without implementing a new system of payment.
Jake Eliot, policy leader at the National Housing Federation, says: ‘To ensure [payment by results] delivers better results and approaches that work for clients, providers and commissioners will need to answer some tricky questions. There are big challenges around defining and pricing outcomes and deciding which organisations are best placed to manage risk in contracting.
‘Payment by results is clearly worthy of exploration,’ he says, ‘but it’s not the only route to better outcomes and commissioners and providers facing cuts will be live to risks of getting tied up in overly complex contract management if it doesn’t deliver results.’
Inside Housing spoke to three organisations that are running pilots to find out how they set their targets, and whether, one year on, they think the scheme will lead to more service providers scoring a bulls-eye when it comes to delivering services to clients.
- Number of SP providers involved: 3
- Budget for those providers: The providers’ contract values range between £270,000 and £695,000
- Start of project: October 2011
- Client group: young homeless people, substance misusers and offenders
Eileen McMullan, commissioning manager, Supporting People, Islington Council
‘We started testing the model in October last year having developed it in partnership with One Housing Group, the Single Homelessness Project and Penrose, which provides social inclusion and rehabilitation services to people with mental health and alcohol and substance abuse problems. The payment mechanism at the moment is a virtual one – we’re not actually doing proper payment by results, we’re just testing it over our conventional system, measuring what payments would be made under payment by results – but we have chosen not to implement this into existing contracts.
‘We’ve based our framework on the outcomes that we were already working with providers on under the national outcomes framework, developed by the Communities and Local Government department. Although it has been modified to allow us to measure the progress of service users within the service, and not just those who have moved on. Supporting People providers are familiar with the framework, which is based on things like economic well-being and improving health. Providers were really interested in being part of the pilot and they volunteered and really engaged with it.
‘The outcomes-based payment approach has made quite a difference to how SP providers are working with their clients. The purpose and priorities of the service are much clearer, and it has focused their attention on what it is they are trying to achieve with people.
‘We’ve just done our first six month review of the pilot and we’ve made the outcomes more specific so the services can be as focused as possible. Each outcome area has a number of subsections with targets attached to them; for example, achieving paid work or accessing education and training. We have reduced the number of these outcomes to make them clearer for service providers.
‘In a further six months we’ll be in a better position to say whether we want to roll this out for procurement contracts. We’re looking at implementing the payment by results model for other servicesat the moment, but we’re keen to learn from this year first.
‘The providers have entered into this process with us and we’ve met them regularly to see whether there are any risk issues [around providers being left without enough money to run services] or anything we need to think about. The issue we need to look at in the future is that we get our definition of outcomes really accurate and that the targets are realistic so we don’t risk changing what services do.’
- Number of providers involved: 4
- Budget for those providers: £3.3 million
- Start of project: September 2011
- Client group: homeless people, individuals with mental health problems, victims of domestic violence and offenders
Neil Tryner, head of business development, Midland Heart
‘We are the only provider-led pilot [meaning that Midland Heart is the only organisation that provides SP services directly to receive payment by results pilot funding], so we’re in a unique position. Our plan was to test if a cash bonus on top of a contract value improved outcomes or if the extra money provided a perverse incentive for negative outcomes. Would an additional cash bonus lead to staff working differently to deliver better outcomes, or would it create negative incentives, such as staff cherry-picking the clients they work with?
‘We’ve involved three partner organisations – Women’s Aid, Birmingham Mind and Freshwinds, which offers care and support to people living with life threatening and life-limiting illnesses – to test different models, paying the bonus to individual staff members or to the organisation as a whole. The pilot is running in conjunction with Birmingham Council’s SP team which supports the project.
‘Under our pilot we are not looking at changing the current contract model. We’ve been up and running since September and we tested payment by results on two outcomes, which were “making a positive contribution” and “enjoyment and achieving”. Six months in, internally we’re already seeing some good learning from the pilot and some things that are quite reassuring. We found our staff were not motivated by the prospect of securing a cash bonus themselves – they felt that the success of a customer couldn’t always be attributed to one member of staff. They did like the fact that, if they worked together, the money would come to the programme. They felt that if they overachieved then the reward should go to customers.
‘Because it was our pilot we could control how we set it up. There are issues about how you administer payment by results and how you demonstrate the results – how do you demonstrate an outcome is linked to a particular action? We’re doing some more work on how you measure it and how you quantify it.
‘Although we do not propose to adapt the model tested in the pilot, we are exploring alternative models.’
- Number of providers involved: 8
- Budget for those providers: £1.5 million
- Start of project: November 2011
- Client group: socially excluded people
Dave Brown, strategic review co-ordinator at Stockport Council
‘It’s still early days for the pilot. We only started it at all because we had the support of providers including the Threshold Housing Project, which provides housing and support to homeless and vulnerable people, and NACRO, a charity which specialises in reducing crime. We’ve also had extensive consultation from service users. The providers signed up for payment by results because they realised that’s the way the government is moving. But the other reason is because moving to work on outcomes frees up the providers to deliver the service in a way that is more appropriate for clients. It’s moving away from the idea of it just being a process. The pilot has shown both a more refined focus on clients and support needs and a more constant approach in terms of outcomes.
‘We’ll start a process of reviewing where we’ve got to with the pilot next month to check how people are actually seeing it on the ground. There’s an increasinglevel of interest from providers because service users can see that what they want is having a direct impact of what’s being provided, and in turn, that’s being checked by us to see what is actually being delivered.
‘One of the things that’s been quite impressive to us is the level of involvement from service users from a range of services who sit on our residents’ forum. They helped develop the framework, providing a critical appraisal and working very hard to think about the detail of the process. Of course, in the end you’re not aiming for 100 per cent perfection, you’re aiming to get to a position where people feel more in control of the service they’re receiving. We see the pilot as something that is evolving.
‘At the moment we’re running an 80/20 model, but we’ve been approached by a few providers who want to change that to 70/30 or even 50/50 because they think, if you’ve got to do more for less, as we keep being told, you can only do that if you have freedom over the process. Service providers think that the more money they have hinged on the success of their service the more flexibility they will get
in the long run.
‘Providers are being much more focused on the needs of clients and more flexible in terms of staffing and service design. However, as we still pay 80 per cent up-front, we have expectations about that 80 per cent. If the core grant from the government is reduced, so will our control on the service. Money paid as a “reward” for achieving agreed targets is free of any controls or expectations. Providers can invest that “reward” in any way they wish. Most have a clear desire to grow their business and test out service models – the bigger the pot the more they can do.
‘Stockport is also moving toward having all service users on personal budgets – some providers, sensibly, see payment by results as part of the path toward that, and want to use the pilot to move away from a reliance on 100 per cent, up-front grant funding.’