The dangers of payment-by-results in probation

Grayling's reforms show the coalition hasn't learned from the failure of the Work Programme.

Today the Justice Secretary, Chris Grayling, set out the coalition’s latest payment-by-results (PBR) scheme. Originally developed as a way of contracting out back-to-work employment services, this public services version of ‘no win, no fee’ is going to be extended to the probation service in an attempt to bring down reoffending.

The idea is simple – services once delivered by the state are contracted out to private and voluntary sector providers, but a big chunk of these providers’ fees are only paid if they achieve certain outcomes. So in the Work Programme around 80 per cent of the fee is paid only once an unemployed person has been supported into a sustainable job. In the probation service, the measure of success will be reoffending rates. The state only shells out if private companies do what they promise. What could possibly go wrong?

The answer is, unfortunately, quite a lot, as the Work Programme has shown a couple of years into the original contracts. And none of the lessons it’s thrown up seem to have been taken on board.

First, PBR is essentially a way of the state contracting out risk and uncertainty. In order to come up with the right price tag, the state needs to be able to price that risk. The problem comes when public commissioners have no idea about levels of risk involved in what they’re commissioning – and when contractors themselves have no control over some of the biggest risks like the state of the economy in the Work Programme. This is one reason why Work Programme contractors are likely to find themselves in difficulties – the original contracts built in overly optimistic assumptions about the labour market. So the contracts are too stretching and if they are stuck to, the government in effect will be underpaying for services given the economic backdrop.

Does it really matter? Surely underpayment is no skin off the state’s nose. But this is far too simplistic. There’s too much at stake with unemployment – the Work Programme providers really are too big to fail, which some of them may do if they fail to meet outcomes set out in their contracts. That’s arguably even more true in the case of probation services, where public safety is at stake. This implicit guarantee at least partially erodes the point of PBR as a risk transfer mechanism. And it muddies accountability. If the economy’s doing worse than expected – which affects reoffending as well as unemployment – who’s responsible for contractors not meeting their outcomes?

Second is the impact of payment-by-results on the voluntary sector. These PBR contracts couldn’t be more distant from the notions of "big society" or devolution – the proposals for the probation scheme are for just a handful of contracts covering huge swathes of the country. Only large private companies are able to absorb the risks involved in going for a contract of this size, which is why it is the Sercos and A4Es of this world delivering the Work Programme rather than even the largest charities involved in welfare to work. The idea is that these big contractors subcontract to the voluntary sector. Yet the Work Programme contracts have been structured in such a way that private providers can cream off the ‘safe’ payment not linked to outcomes and pass on more – not less – risk to the small voluntary organisations with whom they subcontract. The result is that far from building up voluntary sector capacity, PBR risks squeezing it at the expense of big companies. No wonder the sector is outraged.

The third fundamental problem with PBR is that it discourages knowledge-sharing of what works – whether that’s getting people back into work, improving kids’ reading or reducing reoffending. Initial data on the Work Programme shows there is big variance in the performance of different companies. What are some doing that’s more effective than others? This is a question of huge public interest. Yet PBR means that companies – far from sharing best practice across the public sector – have a commercial interest in protecting their recipes for success. This is one example of where there is a real tension between the profit motive and public interest, and it needs to be managed.

None of this to suggest that there is anything inherently wrong with private sector delivery of public services. Of course the public sector could stand to gain from intelligently incorporating some learning from the private sector if it’s done in the right way. But it’s just as ridiculous to say the private sector is always better at delivering public services than it is to say it’s always worse.

Unfortunately, the state has a history of making some pretty bad deals with the private sector – from PFI deals gone wrong to the public-private venture capital funds that lost huge amounts of money in the 1990s and 2000s. All of these examples highlight the importance of getting the relationship - and, crucially, the contract that structures that relationship – between the public and private sector right. But unfortunately for those who adopt a ‘private sector good, public sector bad’ mantra, that’s probably trickier to do than delivering efficient services in the first place. It’s a great shame the coalition shows no indication of learning the lessons from the Work Programme – and it means there’s a real risk PBR ends up being the PFI story of the 2010s.

Justice Secretary Chris Grayling speaks at last year's Conservative conference in Birmingham. Photograph: Getty Images.

Sonia Sodha is head of policy and strategy at the Social Research Unit and a former senior policy adviser to Ed Miliband. She tweets @soniasodha.

Photo: Getty
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The vitriol aimed at Hillary Clinton shows the fragility of women's half-won freedom

The more I understand about the way the world treats women, the more I feel the terror of it coming for me.

I’m worried about my age. I’m 36. There’s a line between my eyebrows that’s been making itself known for about the last six years. Every time I see a picture of myself, I automatically seek out the crease. One nick of Botox could probably get rid of it. Has my skin lost its smoothness and glow?

My bathroom shelf has gone from “busy” to “cluttered” lately with things designed to plump, purify and resurface. It’s all very pleasant, but there’s something desperate I know at the bottom of it: I don’t want to look my age.

You might think that being a feminist would help when it comes to doing battle with the beauty myth, but I don’t know if it has. The more I understand about the way the world treats women – and especially older women – the more I feel the terror of it coming for me. Look at the reaction to Hillary Clinton’s book. Too soon. Can’t she go quietly. Why won’t she own her mistakes.

Well Bernie Sanders put a book out the week after the presidential election – an election Clinton has said Sanders did not fully back her in –  and no one said “too soon” about that. (Side note: when it comes to not owning mistakes, Sanders’s Our Revolution deserves a category all to itself, being as how the entire thing was written under the erroneous impression that Clinton, not Trump, would be president.) Al Gore parlayed his loss into a ceaseless tour of activism with An Inconvenient Truth, and everyone seems fine with that. John McCain – Christ, everyone loves John McCain now.

But Hillary? Something about Hillary just makes people want to tell her to STFU. As Mrs Merton might have asked: “What is it that repulses you so much about the first female candidate for US president?” Too emotional, too robotic, too radical, too conservative, too feminist, too patriarchal – Hillary has been called all these things, and all it really means is she’s too female.

How many women can dance on the head of pin? None, that’s the point: give them a millimetre of space to stand in and shake your head sadly as one by one they fall off. Oh dear. Not this woman. Maybe the next one.

It’s in that last bit that that confidence racket being worked on women really tells: maybe the next one. And maybe the next one could be you! If you do everything right, condemn all the mistakes of the women before you (and condemn the women themselves too), then maybe you’ll be the one standing tippy-toe on the miniscule territory that women are permitted. I’m angry with the men who engage in Clinton-bashing. With the women, it’s something else. Sadness. Pity, maybe. You think they’ll let it be you. You think you’ve found the Right Kind of Feminism. But you haven’t and you never will, because it doesn’t exist.

Still, who wouldn’t want to be the Right Kind of Feminist when there are so many ready lessons on what happens to the Wrong Kind of Feminist. The wrong kind of feminist, now, is the kind of feminist who thinks men have no right to lease women by the fuck (the “sex worker exclusionary radical feminist”, or SWERF) or the kind of feminist who thinks gender is a repressive social construct (rechristened the “trans exclusionary radical feminist”, or TERF).

Hillary Clinton, who has said that prostitution is “demeaning to women” – because it absolutely is demeaning to treat sexual access to women as a tradeable commodity – got attacked from the left as a SWERF. Her pre-election promises suggest that she would probably have continued the Obama administration’s sloppy reinterpretation of sex discrimination protections as gender identity protections, so not a TERF. Even so, one of the charges against her from those who considered her not radical enough was that she was a “rich, white, cis lady.” Linger over that. Savour its absurdity. Because what it means is: I won’t be excited about a woman presidential candidate who was born female.

This year was the 50th anniversary of the partial decriminalisation of homosexuality, and of the Abortion Act. One of these was met with seasons of celebratory programming; one, barely mentioned at all. (I took part in a radio documentary about “men’s emotional experiences of abortion”, where I made the apparently radical point that abortion is actually something that principally affects women.) No surprise that the landmark benefiting women was the one that got ignored. Because women don’t get to have history.

That urge to shuffle women off the stage – troublesome women, complicated women, brilliant women – means that female achievements are wiped of all significance as soon as they’re made. The second wave was “problematic”, so better not to expose yourself to Dworkin, Raymond, Lorde, Millett, the Combahee River Collective, Firestone or de Beauvoir (except for that one line that everyone misquotes as if it means that sex is of no significance). Call them SWERFs and TERFs and leave the books unread. Hillary Clinton “wasn’t perfect”, so don’t listen to anything she has to say based on her vast and unique experience of government and politics: just deride, deride, deride.

Maybe, if you’re a woman, you’ll be able to deride her hard enough to show you deserve what she didn’t. But you’ll still have feminine obsolescence yawning in your future. Even if you can’t admit it – because, as Katrine Marçal has pointed out in Who Cooked Adam Smith’s Dinner?, our entire economy is predicated on discounting women’s work – you’ll need the politics of women who analysed and understood their situation as women. You’ll still be a woman, like the women who came before us, to whom we owe the impossible debt of our half-won freedom.

In the summer of 2016, a radio interviewer asked me whether women should be grateful to Clinton. At the time, I said no: we should be respectful, but what I wanted was a future where women could take their place in the world for granted. What nonsense. We should be laying down armfuls of flowers for our foremothers every day.

Sarah Ditum is a journalist who writes regularly for the Guardian, New Statesman and others. Her website is here.