More nationally consistent measures of local authority children’s services provision must be put in place before departments can implement the payment-by-results (PBR) system recommended by Graham Allen, according to sector experts.
“A national set of indicators would be really useful for local authorities because it would help them monitor which services were working well and achieving the best outcomes,” said Carola Bennion, director of Beacon CIC, which advises commissioners and providers on PBR.
“Then, if they wanted to, authorities could easily attach a payment to the result or outcome because they would fully understand its effectiveness. It would also allow directors to see how well they’re doing compared with other areas, which would lead to more benchmarking.”
Bennion recommended developing a system similar to the National Indicator Set (NIS), which was created in 2008 and wiped out in March this year after losing momentum. The NIS was the only set of indicators on which central government performance-managed local government.
Bennion emphasised, however, that the indicators would not necessarily have to be imposed by the national government. Rather an independent early intervention foundation, as proposed in Allen’s first report, could do this.
“If measures were imposed upon local government, it would be counter-productive and if local authorities were left to wash around completely on their own, that would also be counter-productive,” Allen said.
“The whole point of the report is to get the right people around the table. Clearly we don’t want every authority to have to reinvent the wheel on their own, which is why it makes sense to have the early intervention foundation in place to do all this analysis on measures and outcomes.”
On the financial side, experts have warned that local authorities need to understand what their early intervention spend is achieving.
“Authorities need to get a financial grip on unit cost in children’s services so that they understand clearly what they’re spending their money on, the reasons for that spend and precisely how much they’re spending,” said Iain Hasdell, UK head of local and regional government at financial consultancy KPMG.
“They need to ensure they see clearly how much they’re spending on early intervention versus late intervention before these systems can be put in place.”
Hasdell said authorities also needed to make financial investment in the cultural shift towards early intervention, which Allen emphasised in his report, before PBR would be a realistic option. He said enhanced training would be one way to change the attitudes of departments and increase competence in this area.
“Most local authorities are trying to change the culture towards early intervention and that’s very positive, but they need to accelerate that,” Hasdell said. “They need to invest money and human resources in a cultural change before they’ll be able to accomplish anything further.”
Those closer to the council frontline have said many aspects of the shift to PBR should not require much preparation at a local authority level, however.
“I think the step to a PBR system for local authorities commissioning to providers is not such a great step from the kind of commissioning that’s already going on,” said Matt Dunkley, president of the Association of Directors of Children’s Services (ADCS). “Part of the existing commissioning process is to define the outcomes for the services they want. So defining those outcomes officially and attaching a financial structure to them shouldn’t be overly complicated.”
Dunkley said the problems that could arise would be within councils’ responsibility to identify the cost of specific outcomes.
“When you’re paying by results, two things can happen,” he said. “You reward the wrong behaviours inadvertently, because you reward what is producing the cash, or you latch on to short-termism because you need something that shows a result quickly.
“In the longer-term, the issues are to establish cause and effect and causality. If you’re trying to keep more young people out of prison, for example, actually knowing which of the early interventions in their life made the difference 15 years down the line isn’t easy.”
Debbie Jones, ADCS vice-president and director of children’s services in Lambeth, said that, as one of Allen’s early intervention pathfinders, the south London borough had been carefully considering the potential challenges.
“We’re clear that the issues around those incentives have to be avoided and the issues around partnership and calling to account are equally important,” she said. “As ever with these initiatives, particularly when you know how high the stakes are, you make sure that you test those systems.”
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