Outcome-based payment schemes: government's use of payment by results: report by the Comptroller and Auditor General

National Audit Office
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This report reviews the government’s recent experience of using payment by results (PbR) to deliver public services. PbR is a mechanism where all or part of the payment depends on the provider achieving outcomes specified by the commissioner. Providers are, to a greater or lesser extent, free to choose the interventions needed to secure the desired outcomes. This report highlights lessons on the selection and implementation of PbR in the UK public sector. Its intended main audience is commissioners and senior decision-makers within departments, as well as officials at the centre of government with an interest in public service delivery models. The report argues that PbR is not suited to all public services and commissioners should justify their selection of PbR over alternative delivery mechanisms. It suggests that PbR is a technically challenging form of contracting, and has attendant costs and risks that government has often underestimated. To get scheme design right commissioners need to understand potential providers’ capacity to take on risk. It is essential that commissioners establish performance expectations at the start of a scheme, taking into account baseline performance and non intervention rates and actively monitor and manage provider performance. (Edited publisher abstract)

Subject terms:
commissioning, outcomes, performance evaluation, financing, intervention;
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United Kingdom
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