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Outcomes are 'easily manipulated' in payment-by-results contracts

Finance | Niki May Young | 25 May 2011

Social value is expensive and difficult to measure and results could be easily rigged by organisations applying to gain or retain contracts, according to speakers at the 3SC Commissioner's Seminar at County Hall yesterday.

The event featured an appearance from Chris White MP whose Public Services, Social Enterprise and Social Value Bill, which is currently at committee stage, aims to reform the value system in the commissioning process.

Social value is “at the heart” of this “third stage” in commissioning, he said, referring to the first stage dating back to the 1980s which was focused on controlling costs, and the second stage in the 1990s which saw this evolve to consider uses of implementation and delivery of services:

“Best value is really key to what we are trying to do and trying to change and trying to gain for commissioners. Best value will place duty on local authorities to consider overall value including the environment and social value when renewing service provision.

"Fortunately there seems to be a great momentum behind these ideas and I believe that this shows how important people see commissioning and how the government values commissioners as key players in achieving a new vision of public services,” he said.

Measurement 'very difficult'

But White had missed earlier comments from David Clarke, director of civil society commissioning at the National Audit Office, who had raised concerns over the ability to measure social value, and ducked out before Camila Batmanghelidjh explained how her charity, Kids Company, could easily doctor social impact measurements if it chose.

While Clarke acknowledged the benefits to measuring social impact, he raised concerns over the practicality: “At the moment it’s actually very difficult when there is a competition for people to take into account the extra social value that a civil society organisation can deliver. It’s very difficult to do that in a way that you can make stand up.

“Certainly we’re very interested in social return on investment and other ways of measuring social benefit. It’s very important that this can be captured and captured in a way that is comparable, which I know is very difficult. I think that can only be of benefit to the civil society sector, but is quite expensive to do, maybe.”

Stephen Lloyd, senior partner at Bates, Wells and Braithwaite, agreed that measuring social value is difficult. And David Griffiths, chair of the Academy for Justice Commissioning, added:

“Whilst there is a political thrust to move from central government to individuals and local communities, and while I think that commissioners are very keen to achieve outcomes, I think that until we fix the issue of auditing social value and how we can get our procurement colleagues to move from public regulations and within public regulations to allow us to procure social outcomes... we are in danger of not achieving as much as Chris talked about wanting to achieve.”

Manipulating results - a grassroots example

Batmanghelidjh, chief executive of Kids Company, took the discussion to grassroots level by warning that measuring can be manipulated.

"If I wanted to manipulate results," she said, "I'll tell you how I could do it..." before explaining in detail that she could screen children in advance to prioritise those who would see faster and more significant improvements to their wellbeing and behaviour and backbench those who would progress slower and less dramatically.

"If my commissioner isn't sophisticated enough and the commissioning narrative isn't significant enough, what would happen is, to give my commissioner the results that they want because they come from quite crass measures at the moment, I would just cherry-pick all the developed frontal lobe (less challenging) children, put the programme in, then produce the results and I'd leave outside my door the children with poor frontal lobe and limbic system challenges (more challenging).

"So, my point is this: our intellectual measuring tools are not sophisticated enough for the psychological states that we are having to deal with and the risk is that if we don't make these measuring tools sophisticated enough, what we are going to create in this agenda is a real invisible disadvantaged group of clients that charities and local NGOs won't want to take because they won't get the payment by results that they are working for."

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Directory: Bates Wells & Braithwaite
Who's Who: Stephen Lloyd | Camila Batmanghelidjh