While Manitoba looks to SIBs, the British government raises questions, not about PFS itself but by the sheer incompetence of government – unsurprising for those doomed to dealing with the unaccountable British blob which festers amidst British society without any coherent organisation or efficiency.
The Economist
It was supposed to be one of the coalition government’s most radical policies. In 2012 David Cameron, the prime minister, promised to put “rocket-boosters” under a scheme of public-service provision called “payment-by-results” (PBR). Under the scheme, the government pays a provider to deliver a public service, but only if it achieves a successful outcome. With £1 ($1.44) in every £3 the government spends on services going to a private firm, putting in the right incentives makes a big difference. There is, however, a groundswell of opposition to the move.
Such schemes are not new—in the Napoleonic wars sailors were remunerated if they captured an enemy ship—but the government is now using them more widely, including in welfare, housing and criminal justice. A report in 2015 by the National Audit Office (NAO), an independent watchdog, identified 52 programmes worth about £15 billion.
It may seem obvious to pay providers by results, rather than upfront. It means the state pays for services only if they work. If they don’t work, the private sector bears the consequences, helping to cut wasteful public spending. PBR is also supposed to encourage innovation, since it focuses only on ends, not means.
In reality, things have not always worked out so well. PBR can create strange behavioural incentives, including a phenomenon known as “creaming”. Given the emphasis on meeting targets, providers are often tempted to focus on the easiest-to-help people, says Russell Webster, an expert on PBR. Take the case of the “work programme”, a policy to help the unemployed where 80% of the budget is linked to PBR. Despite higher payments for certain groups, it has proved most lucrative to target youngsters, who pick up skills quickly. In 2011-15 a third of 18- to 24-year-olds in the programme moved into work for a “sustained” period (at least three or six months, depending on the person), compared with a quarter of 25- to 49-year-olds.
New Manitoba Government Delivers First Budget
NUPGE
On May 31, Manitoba’s newly elected Progressive Conservative government unveiled its first budget. The budget charts a course for how the Province will invest tax dollars in the coming year and sets a tone for other organizations to plan for their futures.
Budget contains areas causing concern but also positive measures
What the budget revealed was not radically different from recent budgets under the previous government, but there were signs of concern. Of particular note was the inclusion of language about privatization schemes, like social impact bonds, being used to fund public services, the relative lack of attention paid to alleviating poverty, and no mention of an increase to the minimum wage. There was also a cut of $1.8 million in funding to the Manitoba Developmental Centre.
On the positive side, the budget included continued support for home care, long term care, community living, and colleges and universities, while the Selkirk Mental Health Centre and Addictions Foundation Manitoba also saw their funding maintained.