Wednesday, 18 January 2012

Payment by results?

The Guardian Public Leaders network has a very droll account of the session at yesterday's Communities and Local Government Select Committee on the 'troubled families' community budget scheme:

The intellectual gyrations undertaken around the taxing subject of when a target is an outcome would be bracing for the most ardent advocate of callisthenics. Sadly, when it comes to community budgets we still don't seem to be making much progress towards achieving the body beautiful.

There are some requirements for a workable scheme which are relatively easy to describe: 

1. A theory of change - the outcomes being described by Ministers (children back to school, reduced crime, parents into work and reduced expenditure) are all in themselves quite sensible but the relationship between them and the need for other elements are crucial. This is vexed territory but one clear question is whether it is for Government either explicitly or implicitly to provide an answer or for each locality to do so. For a workable scheme one feels that it should be the latter

2. Clear results. The frankly ridiculous arguments about when is a target not a target are largely political. The previous Government spawned a 'target culture'. So the current one can't abide them. Except when it finds that there is just too much pressure (such as on waiting lists). The point is that targets are not bad in themselves. The interesting question is who sets them and in respect of what. Some outcomes based accountability thinking would be welcome here - it might even help the Government to avoid setting targets by allowing those better placed to do so and to make more sensible allocations of responsibility between different organisations. That is all much easier if there is an agreed theory about what needs to change

3. Identification of the decision makers. Most of us thought that this was meant to be a scheme to promote more integrated decision making at local level. Currently it looks like a fragmented scheme which wishes the ends without willing the means - in particular reinvigorating the local collective decision making which has been pretty much systematically undermined by lack of support or active attack. Government needs to make clear that such arrangements are needed everywhere - not just where there are Mayors - and that where the local manifestations of national public bodies need to play a role and provide resources they are actively required to play their part

4. Addressing head on accountability to Parliament and at local level. Parliament has long been much stronger on post hoc examination of the regularity and value for money of resources which it has voted than on exerting influence in advance on allocations and the use of public money. The effect is that regularity becomes a major hobble on creative use of money at local level. That needs to change and community budgets are a good example of how it could do so by pushing more direct accountability down to local level rather than the further bout of callisthenics currently being undertaken to try to make a more devolved future fit with accountability via the Departmental Accounting Officer.

5. Simplicity. Community budgets can work perfectly well without a payment by results element. But given that the current dispensation is for a major PBR element it requires organisations to take risks, possibly big ones. Calibrating those risks raises the inevitable question of measuring their achievement (see the discussion above) but in doing so familiar dangers hove into view (about which I have posted previously): on massive complexity and a highly contractual culture; on making it much more difficult for organisations (typically voluntary and community sector ones) without much working capital to contribute; on hitting the target but missing the point because the focus is on what can be measured rather than what is significant; of being unambitious (repeat ad nauseam). Trying to line up organisations to take big financial risks in notoriously problematic areas of public policy is a major additional burden on making a community budgets scheme work. Some realism about the effects of such a requirement would be welcome as well as a willingness to have a further think about these sorts of issues rather than dodging the bullets on when an outcome becomes a target.

6. Trust. Probably the biggest missing ingredient of all.

To finish with a cheap point. A payment by results contract for the development of community budgets would make interesting reading.  

No comments:

Post a Comment