Collaborating on Payment-By-Outcome Projects

A two day forum exploring payment-by-outcome projects, focusing on the social causes of re-offending in Queensland, delivered some challenging but innovative approaches to addressing them, writes Sandy Blackburn-Wright, Managing Director of Social Outcomes.

You know something is shifting when a senior Government executive says of a two day design forum “I’ve never had a conversation like that in all my time in Government”.

The Department of The Premier and Cabinet and Queensland Corrective Services, Department of Justice and Attorney General invited 80 colleagues from the community sector, half a dozen other Government agencies, social enterprises, philanthropists, universities and the private sector, to attend a two day design forum facilitated by PwC’s accelerated solutions team, The Difference.

The focus of the two days was to explore what payment by outcome projects focusing on the social causes of re-offending in Queensland would look like, with the design principles being developed by all the stakeholders in the system.

The current approach to reducing re-offending is where Corrective Services, or another agency concerned with incarceration rates, calls for tenders for the delivery of a program of work aimed at providing pathways to employment, or other similar approaches.

Whilst this has some success, the program often addresses a single cause of re-offending, in isolation from a complex web of social problems, and therefore success is generally limited. In addition, long term outcomes are not measured. Rather, contracts tend to be output focused, noting how many training courses were run, how many job placements were made, and so on.

The universal consensus from all participants in the group was that we could do better.

Participants were invited to spend two focused days exploring complex issues that are creating an increasing rate of offenders returning to prison, that is of concern to all sectors in Queensland. The Design Forum also sought to develop a deeper understanding of what a payment by outcome approach could offer. Academics from several Queensland universities and Tom Humphreys from Corrective Services shared their research findings and data insights, both here and internationally, helping to throw light onto the nature of the problem as well as some innovative approaches to addressing them.

Key elements of the problem of re-offending can include a mix of several or all of the following social issues such as family dysfunction (often intergenerational and extended), homelessness, poor educational attainment, long term unemployment, drug and alcohol addiction, poor health and nutrition, mental health issues, having insufficient documentation to secure support from various institutions, no sense of belonging, no hope for the future, and other emotional and psychological baggage.

To address the complexity of the situation and create positive and longer lasting outcomes, a range of Government agencies and social sector organisations will need to collaborate differently. With myself representing Social Outcomes, Jocelyn Bell, formerly of the Benevolent Society and now with the Department of Premiers and Cabinet, and Emma Tomkinson, we shared our experiences on the Social Benefit Bond in NSW and our understanding of other global examples, to explain payment by outcomes mechanisms.

Payment by outcome approaches offer a partnering model that shifts the focus from who commissions or delivers the work, to how to create the desired outcomes. It is a risk sharing approach where the provider has more control over and accountability for program design and the creation of outcomes. It also places a significant focus on measurement, one where Government and the provider collaborate and share data to determine if outcomes are being created and allowing for changes to the program design if the outcomes aren’t as significant as desired.

The contracts are long term, often 5-7 years, on the understanding that outcomes take time and aren’t created in 1-2 years, which is the length of many existing contracts. And importantly, in order to create outcomes, the programs need to have a focus on prevention and address the social complexity in which issues occur.

The two days were long and challenging, but the spirit of goodwill and excitement were palpable. All the participants understood that if we focus on outcomes, work across silos, measure the impact of the work and learn as we go, that we might be able to begin making some headway against these complex problems which affect every one of us. It might also fundamentally change the relationship between sectors and the role they play in society. Next year will be an exciting one in Queensland as we look to get some projects up and running and share what we learn.

About the author: Sandy Blackburn-Wright is the Managing Director of Social Outcomes, a social business that supports multi-sector collaboration using social innovation and impact investing tools to create a positive impact. The blog contains her personal reflections as a participant in the two day Design Forum.