The claim

“With payment by results, your money goes into what works: prisoners going straight, crime coming down, our country getting safer.”
David Cameron, 22 October 2012

The background

Figures from the Ministry of Justice suggest that 59 per cent of adult ex-offenders go on to commit further crimes within nine years of their release.

Of prisoners who get a custodial sentence of less than 12 months, 60 per cent get another conviction within a year of getting out.

This is an expensive state of affairs: reoffending by all recent ex-prisoners cost the economy between £9.5bn and £13bn a year, according to the National Audit Office.

The new justice secretary, Chris Grayling, who engineered the payment-by results revolution at the Department of Work and Pensions, insists the same approach will bear fruit in Britain’s prisons.

The prime minister backed him to the hilt in a keynote speech on criminal justice this week. But what’s the evidence that the new approach will work?

The analysis

Payment by results is a phrase that covers a multitude of sins, but here we’re talking subcontracting providers from the private or voluntary sector to tackle social problems like unemployment, prisoner reoffending, drug addiction and so on, with state funding contingent on various agreed measures of success.

The biggest example is the Work Programme, which Mr Grayling set up in his previous role as employment minister.

Mr Cameron said whoever is contracted to work with prisoners will “do whatever it takes to get these people back living decent, productive lives”.

The Ministry of Justice (MoJ) wasn’t able to add too much detail to that, but that’s kind of the point of payment-by-results, which gives private and voluntary sector providers the freedom to operate as they see fit, as long as they deliver on the results.

The biggest pilot project involves around 3,000 prisoners at HMP Peterborough. It’s funded by investors and sees mentors working with offenders serving short sentences at the prison.

Workers are reimbursed by the MoJ and the Big Lottery Fund if they can improve reoffending rates by 7.5 per cent over the average. Mr Grayling has said: “From what I’ve seen so far, I’m very encouraged that it does indeed work.”

But there are no hard statistics available on outcomes yet, which means we effectively have to take the minister’s word for it.

And when the results do come out they will need careful scrutiny. Prisoners serving short sentences generally get very little support, so it’s likely that any help will be better than nothing, but it may be difficult to prove that payment-by-results is a better model than any other.

Other pilot projects at prisons in Doncaster, Manchester or London are still works in progress, and no studies have yet been carried out into how well they worked.

Payment by results has been trialled in welfare to work, the rehabilitation of offenders, early intervention in problem families, young offenders’ institutions, children’s centres, rough sleepers and drug and alcohol rehab projects. But again, there’s a lack of reliable published evidence about any of these projects.

The government’s only statistical release on the Work Programme so far raised the serious possibility that the policy is leading to fewer job outcomes than we would have expected to see if the government had done nothing.

Leaked figures seen by FactCheck suggests a very slow start to the scheme, and disappointing results so far, although it would be wrong to pre-empt the first release of official statistics.

We were expecting to see these some time this autumn, but it’s now late October and DWP told us today that the date release date is still “to be confirmed”.

Boris Johnson claimed that the payment-by-results Daedalus project at Feltham young offenders’ institution initiative had cut reoffending rates from 80 per cent to 19 per cent among some inmates, but he was later forced to backtrack amid criticism from the chairman of the UK Statistics Authority, Sir Michael Scholar.

In April this year the BBC reported that criticisms of the payment model were removed from a draft report before the final version was published.

At least in this case there were some claims to check. No evidence on the other payment by results schemes have been made public, as far as we know.

Some critics fear that this multi-agency approach could in itself lead to expensive overlaps. A recovering drug addict who’s been released from prison and doesn’t have a job could theoretically be offered help by at least three different payment-by-results schemes, all looking to collect a fee.

The MoJ conceded before the justice committee that “we run the risk of paying for changes that might have happened anyway”.

Another potential pitfall is that organisations might be encouraged to cream off the easiest offenders to make sure they make enough money, while “parking” the more challenging cases.

Again, the MoJ acknowledges this is a potential problem. In the Peterborough pilot, the ministry said the model had been designed to “reduce incentives to ‘cherry-pick’” but warned: “If the approach were rolled out nationally, there could be incentives to ‘cherry-pick’ by prison or area.”

The verdict

A difficult subject to FactCheck, this one, as there are so few facts to play with. Until the government publishes statistics on the HMP Peterborough trial, the Work Programme and other payment-by-results, we can’t be sure that the concept works.

Compare this with the evidence base for another key component in government policy – a move towards community sentences in preference to short spells in jail.

The figures suggest that community service is indeed more effective than prison at reducing reoffending. Prison sentences of less than a year are “less effective at reducing reoffending than both community orders and suspended sentence orders – between 5 and 9 percentage points in 2008,” according to the MoJ.

By Fariha Karim and Patrick Worrall

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Category: Conservatives, Crime, David Cameron, Fact, Fiction
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