State of play with Payment by Results and Social Impact Bonds

Sector thinktank NPC has two articles looking at where we are with Payments by Results and its “natural partner”, Social Impact Bonds.

Making sense of payment by results‘ starts with

While not as newsworthy as it was three or four years ago, PbR has steadily become a common commissioning model. In 2015, the National Audit Office identified 52 schemes containing an element of PbR in the UK, worth a total of £15bn of public money.

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Practicalities of Payment by Results outweigh potential

The National Audit Office has issued a report ‘Outcome-based payment schemes: government’s use of payment by results‘. The NAO news release introductory paragraphs say:

“The government’s payment by results (PbR) schemes are now estimated by the National Audit Office to account for at least £15 billion of public spending. However, neither the Cabinet Office nor the Treasury currently monitors how PbR is operating across government.

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Multiple needs challenges using ‘payment by results’

Challenges in applying ‘payment by results’ (PbR) approaches to services for some of the most excluded individuals in society are highlighted in a new briefing from Revolving Doors Agency.

The report looks at how a range of different PbR schemes have been applied to services working with individuals facing multiple and complex problems, including a combination of poor mental health, offending, substance misuse, and homelessness. » Continue reading news item ... “Multiple needs challenges using ‘payment by results’”

Learning key lessons on Payments by Results

Long, and successful, experience of working with Payment by Results (PbR) contracts has taught Community Links several key lessons. These form the basis of a new 9 page policy briefing available (in pdf 243KB) via

They highlight three main issues which need to be addressed for such contracts to work well:

  • Contract financing needs to be carefully addressed.
  • The size and structure of PbR contracts can determine the role that different organisations play.
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Can Payments by Results drive innovation?

NCVO has published a report on Payment by Results and the voluntary sector, exploring the viability of PbR as an effective method for procuring public services, in particular for harnessing innovation and service quality. NCVO warns that the instability created for providers by PbR is in danger of making them more risk-averse and less inclined to experiment with new ways to achieve results.

News release or see Civil Society Media news item » Continue reading news item ... “Can Payments by Results drive innovation?”