Shifting to paying for outcomes not inputs could save costs and deliver substantial benefits, says a new report from the independent cross-party thinktank 2020 Public Services Trust.
Better Outcomes argues that both central and local government need to rethink radically how they achieve the outcomes they seek.
The traditional focus on paying for inputs should be scrapped wherever possible in favour of 'payment by results'.
Service providers, public, private or third sectors would be paid when and if they achieved desired outcomes.
The authors argue that an outcome driven approach should be explored across a wide span of government functions. Where this was done, instead of government agencies or service providers being given budgets, grants or paid for inputs, government would pay them for when they delivered the desired outcomes or outputs.
It could bring about a revolution in the delivery outcomes desired by the public.
The report argues outcome commissioning should be explored and applied wherever possible to help minimise the risk of cuts in public services over the next decade. It explains how such an approach is possible.
Payment on performance has major advantages; the state only pays for what it wants, it transfers the risk of delivery to providers, it empowers and incentivises them to succeed and it generates great innovation.
This approach, the authors argue, should be utilised by whichever party forms the government after the next general election.
