Policing, payment and results

23 October 2012

The payment by results approach to justice is almost certainly going to happen but will it really achieve its goals? Professor Colin Rogers and Doctor James Gravelle from the Centre for Police Sciences, University of Glamorgan, consider the issues

In a changing world of economics, accountability and service delivery that affects all public services, as well as the police, it is sometimes useful to reflect upon what has passed, and also what may be the purpose, character and shape of our public services in the future. How then are public services, including the police, to control their expenditure in order to maintain an effective and efficient service to consumers, whilst ensuring value for money? One idea as to how it may eventually materialise for policing, given the forthcoming reforms, may be seen in an approach already utilised within the health service and which, it appears, will gain prominence across other public sector services. This approach is called payment by results (PBR).

PBR is the funding system used for payment of work carried out by National Health Service providers in England. In terms of functionality, the PBR approach rests upon commissioning and paying for services. Commissioners pay service providers according to how well they achieve specified outcomes rather than outputs or volumes of service. These outcomes may be social, economic, financial or a combination of all three. What sets PBR apart from other contract types is that a significant amount of payment is withheld until the results are delivered. The payment is directly related to the level of success. This approach should not really come as a surprise to those in the public services as it fits into the present governments policy for achieving 'better for less' from public services.

At its best it is alleged, PBR can deliver savings and bring in new resources at a time when budgets are under great pressure. It also defers costs to commissioners to allow time to realise the benefits of change and preventative work. Further, this approach actually removes operational risk away from the commissioner, onto the provider and can provide clearer accountability for outcomes. In addition to these advantages, PBR offers a choice to consumers or customers in markets that have previously been dominated by one or two service providers, for example, the NHS, the police service or other public sector agencies that operate within monopolies or oligopolies.

It is suggested that driving and promoting competition within closed market environments will improve outcomes for customers or in the wider and broadest context, improve outcomes for entire communities. At its maximum competitiveness, markets would see a mixture of private, public and voluntary agencies offering products or services to customers in whom individuals have the decision and power to decide to seek a service from their preferred provider. Overseeing the competitiveness of such markets are commissioners, who have the ultimate power to commission and decommission poorly performing providers. Such marked-based mechanisms for service delivery may deliver the improvements necessary to deliver benefits for end-users.

If managed incorrectly, it could lead to financial instability, difficulties with service delivery and poorer outcomes for customers. In particular there may be problems particularly with financial management, data quality and effective and innovative commissioning.

Payment by results requires good quality data on costs and clinical activity and it has been suggested that the following are required for a successful implementation of such a scheme.
• Investment in IT systems focusing upon the recording and coding of customer activity, reviewing and strengthening their financial management systems and capacity to ensure that they are equipped to manage in the new environment.
• Ensuring front line managers and staff are aware and fully understand the implications of payment by results and are committed to the changes needed to implement the new system effectively.
• Ensuring a sound monitoring framework is in place to address possible manipulation or gaming of the system.

In the long term, there is also the possibility that the comodification of public services and the introduction of a profit motive may displace other powerful drives such as commitments to public service provision, mission statement or other delivery promises.  Indeed, in the past, there have been reported problems with the veracity of data used for performance measurement within the police organisation, and this must also be of some concern, especially when figures may be used to measure success.

Policing is no longer monopolised by the public police that is the police created by government. Policing is now widely offered by institutions other than the state, most importantly by private companies on a commercial basis.

Consequently, as the new Police and Crime Commissioners come to terms with overseeing the provision of crime and disorder reduction within their given political and geographical areas, they will undoubtedly come under pressure to maintain provision of such services with what will be a constant reduction in overall funding, at least in the short to medium term. How they will be able to ensure provision of these services will be problematic. One answer of course is to employ the current approach of payment by results as witnessed in the health service. However, what this may actually mean is a redefinition of what services are provided and more importantly, by whom.

It may be the case that some services traditionally provided by the public police would be provided for by other service providers under the payment by results approach. This means that the public police would need to realign themselves alongside other commercial suppliers for such provision as high visibility patrolling, crime prevention advice, school liaison work and other such duties not requiring a warranted police officer. In other words, public police, if they wished to continue to provide services in these or similar areas, must realise that they could be just one of a number of service providers for the delivery of such services.

Messages from government and agencies such as Her Majesties Inspectorate of  Constabulary, The Audit Commission and others over the past few years appear to suggest that the police organisation will be re-configured dramatically, or to use term prevalent in some areas of police literature, 'architecturally restructured'. Given the way in which public expenditure is likely to be tightly controlled in the future, and the introduction of commissioners, who may, in part at least, be politically motivated and aware, it seems likely that payment by results will be adopted in some format for the future delivery of policing services in this country.