Pay for success: A results-led system for social outcomes
A results-led system for social outcomes is the new way that governments are tackling some difficult problems. Authors William D Eggers and Paul Macmillan from Deloitte explain how.
The UK is engaged in an ambitious experiment to shift funding across a range of public programs – everything from welfare-to-work to youth services and offender rehabilitation – to focus on real-world results. Naturally, debates are springing up around this concept. Pay for success (alternatively called payment by results) connects buyers of social outcomes – typically governments, foundations, international development institutions and corporate philanthropists – to solution providers, allowing buyers to shift from traditional contracts and grants to rewarding specific outcomes. As with all prizes and challenges, this approach attracts new providers, new approaches, and radically new business models.
“Currently, the boundaries within which public service providers can innovate are quite narrow,” says Tom Gash of the Institute for Government. “Payment by results enables new business models to emerge.” In this way, rewarding success represents an important stage in the creation of functioning markets for social outcomes.
A pay for success system transcends territorial departments and allows providers to scrap experiments swiftly if they prove ineffective. Early failures along the way can even be advantageous, if they lead to improved results before the clock times out...
Read on at Ethos Journal
Ethosis aimed at public sector leaders, politicians, academics and policy specialists debating the future of public services today.
