photo credit: darwinbell
By John Hodson
Please, please no more ‘Payment by results’ (PBR) whinging. The Welfare to Work 3rd sector is full of this kind of sentiment and of course it’s all too easy to empathise with this sort of do or die predicament of unpredictable and very low returns with front loading of risk to providers. Yes there are the dilemmas that arise as to whether or not to participate but surely it’s a bit of a self-indulgent cul-de-sac? This blog from Matthew Taylor, at the RSA, like others, seems to pass over a fundamental point which is that organisations do have a choice, albeit none may be pleasant or convenient and these choices could include going out of business with real impacts on people. But that’s the point isn’t it – businesses have to be business-like and if there isn’t a reliable income generating activity which the organisation can produce then they shouldn’t be in business or at least in the business of choosing to bid for business contracts which don’t necessarily guarantee to pay their way – quite literally. If organisations choose to subsidise themselves to undertake business contracts then presumably they are doing so because they have concluded there are other benefits which on balance make it ‘worthwhile’. Presumably this is a rational choice. Surely business decisions on bidding for work whether PBR or otherwise should be just that not be confused with organisations having ‘moral’ dilemmas or feeling obliged as why they should have to bid.
However where I do think there is an uneven playing field, is that small organisations, I would guess predominantly the 3rd sector, will be squeezed out of this market and similar ones where these conditions prevail because they don’t have sufficient size to achieve economies of scale nor cope with the deluge of regulatory standards that get imposed in these sort of contracts.
Wouldn’t it make a refreshing change rather than give lip-service to the encouragement of 3rd sector, that government contracts included a proportionality clause based on ‘market share’ to allow some flexibility in compliance with the array of procedures and protocols that would otherwise have to be complied with and a simple ‘best endeavours’ clause is used.
So in keeping with the spirit of the season, DWP please include a ‘best endeavours’ contract provision at the top of your New Year Resolutions! Making it retrospective would be even better!
