It is very good to see that my former Downing Street colleague Jeremy Heywood, now Cabinet Secretary, is very clued up and excited about the possibilities that outcome payments could make to solving some of our major social problems. (See this article in The Guardian).
As I know from experience, if the top civil servant says that something is important then the whole civil service will react: expect to see every permanent secretary quickly grilling their team to find out what they are doing in this area.
Jeremy goes further and ponders on whether we would make more progress if there was a body that could tell us which interventions work – to solve issues like reoffending or drug addiction – and which do not. If we had a kitemark for good interventions would that not attract more investment of all types into the successful ones? And what about developing a social policy equivalent to the medical advisory body, Nice?
This is an idea we thoroughly support. The whole point of NPC is making sure beneficiaries get more help and that means we try and make sure that money is better spent, that resource flows to the better organisations and interventions that work, that organisations doing OK are motivated to do better. So the concept of separating the wheat from the chaff is very tempting and we should all consider it.
But as ever, a new approach comes with problems and can be over-hyped. Designing an intervention that works for all prisoners, in all areas, at all times may be searching for the holy grail. We for instance work with organisations who help children with mental health issues and they find that the way they need to shape their activity is different from school to school and from year to year depending on local circumstance, economic issues and the like. So sometimes the kitemark we want is about good charities that are learning and adapting rather than backing a particular intervention.
The places where the government has gone big on payment by results so far is the Work Programme and the inability to handle risk and cash flow has meant that demonstrably effective voluntary sector providers have been badly squeezed in a way that I suspect nobody intended. Would a kitemark have helped them there?
Further, as Sir Jeremy points out, if we go down the road of payment by results then someone still has to pay. If we have found the perfect, kitemarked intervention then we should surely just fund it – and since government money is always cheaper to raise than private, the government should arguably just pay for it. Social impact bonds don’t totally alter that logic.
But these are all issues to keep in mind as we go forward. The basic idea that it’s helpful for charities to measure what outcomes they are achieving and how cost effective it is – be it with government money or donations from philanthropists or ordinary donors – is one that should be pursued. If we could find a good acronym for a new institution to do it, even better.