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Outcomes-based contracts

2 minute read

Work Programme (Department for Work and Pensions)

The Work Programme is a major welfare-to-work programme that uses payment-by-results (PbR). It was launched across the UK in June 2011. It was central to the Coalition government’s welfare reform programme.  

The Work Programme is being delivered by a range of private, public and voluntary sector organisations, which are supporting people at risk of becoming long-term unemployed to find lasting work.

Read the overview of the Work Programme from the UK government. 

Read the National Audit Office report which compares the Work Programme to previous welfare to work programmes and the Department’s aims.

Troubled Families (Department for Communities and Local Government)

The Troubled Families is a programme of targeted intervention for families with multiple problems, including crime, anti-social behaviour, truancy, unemployment, mental health problems and domestic abuse. It seeks to reduce public spending on families who require support from multiple parts of the state. 

The first phase of the programme running from 2012-2015 was allocated £448 million and sought to help 120,000 families. The second phase was launched in 2015 and will finish in 2020. £920 million has been allocated to support an additional 400,000 families. It is a programme for families in England. 

Read a research briefing on the Troubled Families programme for an overview. 

Read the evaluation for 2012-2015, and the early findings from 2015-2020.

Transforming Rehabilitation (Ministry of Justice)

Transforming Rehabilitation was a programme of work from 2013-2016 that was concerned with the supervision and rehabilitation of offenders. The programme has involved the outsourcing of a large portion of the probation service across England and Wales.

The reforms have replaced the previous 35 individual Probation Trusts with a single National Probation Service, responsible for the management of high-risk offenders. There are now also 21 Community Rehabilitation Companies (CRCs) that are responsible for the management of low- to medium-risk offenders in 21 areas across England and Wales. 

Read a simple introduction and timeline on the Clinks website.

Read the official Ministry of Justice white paper – Transforming Rehabilitation: A Strategy for Reform

Payment by Results Aid Projects (Department for International Development)

Payment-by-results is a core part of the Department for International Development’s (DFID) work. In September 2013, 71% of contracts for services issued centrally by DFID had a performance-based element, where payment was conditional on verification of a result being achieved. There are over 20 projects in operation but a few examples are stated below.

There was a Development Impact Bond (DIB) to control the spread of sleeping sickness in Uganda in the early 2000s. This involved targeting cattle in Uganda by supporting private veterinary practices to distribute drugs. 

The End Child Marriage in Ethiopia was a £10 million, almost 6-year, DFID-funded partnership with the Government of Ethiopia (GoE) that sought to delay marriage by at least one year for 37,500 adolescent girls. 

Read Chapter 2 in DFID's Sharpening incentives to perform to see the payment-by-results programmes that are in operation.

Read the evaluation report to see 20 projects and to take a look at the effectiveness of the programmes.  

Drug and Alcohol Recovery Pilots (Department of Health)

The Drugs and Alcohol Recovery pilot schemes were initiated in April 2012 in eight commissioning areas. A proportion of provider payments were linked to the achievement of specified outcomes representing recovery from problems relating to drugs and alcohol misuse by service users. The purpose of the PbR pilots was to develop and test out this new approach to the commissioning and delivery of drug and alcohol services. 

Find out more about the programme and understand the impact by reading the evaluation of the Drugs and Alcohol Recovery Payment by Results Pilot Programme – Final Report.  

Outcomes funds for social impact bonds

There are many outcomes funds that are for setting up social impact bonds, these include the Innovation Fund, the Life Chances Fund and more. Read UK Government outcomes funds for SIBs for more information.