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Bonzo Funding: Payment by Results

Paul Barasi spent eleven years developing the Compact – an agreement between government and the voluntary sector to help both sides work better together. But recent government plans to bring back ‘payment-by-results’ funding for services are about as far from a ‘more like people’ approach as you can get. Paul takes their hypocrisy to task in his first Concrete Solutions blog.

Raiders of the Lost Compact

Paul Barasi

Paul Barasi

The Compact was first conceived in a chat on a train between local activists and MPs and led to the 1998 agreement for ‘Getting It Right Together’ between the Voluntary Sector and Government. It eventually graduated to a more holistic ‘Compact Way of Working,’ yet could be buried to government officials singing ‘Never Mind the Cash Flow, we’ve got Payment By Results.’

Around five years ago, many local partnership relationships peaked with the emergence of ‘a Compact way of working.’ This approach transcended a Ten Commandments-style written declaration. It was about far more than just following the rules. It meant living the shared values like treating partners fairly; working together from the start on issues affecting the voluntary sector; and above all, trust.

Fast forward to the Coalition Compact and we can still hear such hits as “Social action over state control and top-down Government-set targets,” “Shifting power away from the centre,” “Equal treatment across sectors,” “Proportionate Risks” and that chart-topper: “Payment in Advance”. But recently the tune has changed; instead we are hearing “Retrospective payment” which will reward Efficiency through professional top down control and take us back to a More Like Paper approach.

But will the voluntary sector be able to match government professionals in delivering pre-set results on time and within budget?

And why should the voluntary sector have to play by one set of rules, when the lion’s share of government spending seems to have none of the same stipulations attached?

Games with results

The London Olympics taxpayers’ subsidy rocketed tenfold from £1bn – with results measured by what: 29 UK gold medals for £10bn? Number of unethical sponsors or school playing fields sold? Who decides success? Imagine if the voluntary sector tried to play by these rules!

Wars with inhuman results

Afghan and Iraqi wars were a snip for the UK at just £20bn. Who’d know they’d be no weapons of mass destruction – as if the 2m demonstrators, dismissed as misguided by Blair, had been any advance indication. Who bothered to define what success would look like: maybe keeping the human cost of liberation down below 300,000 civilian deaths. Who pays for failure?

Subs and planes

Or the hopelessly misnamed “Astute” nuclear submarine: just £1bn over budget and delivered 4 years late. That makes the £100m cost of the May 2012 U-turn on picking Navy fighter jets hardly worth mentioning.

(OK, our subs won’t know where they are without US navigation satellites nor could these launch the leased Trident ‘independent’ nukes without the Yanks, but hopefully the jets will be able to do u-turns and somersaults in mid-air before more of our cash disappears into thin air.)

Rewarding Government efficiency?

The Home Office could get paid on the basis of how many Brits are extradited to the US or how many decades this takes or how much it spends on legal costs to do it, or not to do it?

It’s not just officials getting bonuses instead of the sack, but would anyone trust either of these government departments to do their weekly shopping?

Thatcherite Retrials

The crude payment by results regime that government wants to impose seems a throw-back pre-dating even the 1990s. Back then the Department of Health was experimenting with Outcomes Funding for alcohol counselling which valued not just the number who achieved total salvation but the progress people made along the way. After all those battles over sustainability, not funding on the cheap (rebranded more for less), full cost recovery, unfair claw back, down-pricing contracts, is government returning to rip-offs like a supermarket displaying one price and charging another?

What counts in the community?

I remember one housing estate project which achieved the wonderful result of women no longer being afraid to go out after dark. It didn’t count, as government hadn’t included this as a pre-set target. I recall a street theatre group destroyed by funders making it not just perform but have performance targets, and board meetings, too. Or take a project for young volunteers who cleaned up the environment: they made lots of new friends, were more likely to volunteer again, and acquired skills and confidence to do new things – what a result!

Saying goodbye by shaking the crap off our feet

The dehumanising organisational culture of the Civil Service can’t even compare with the traditional voluntary sector, let alone new grassroots social movements, in terms of its understanding of what kinds of systems will help people to realise their potential and make change happen. Trust-based funding is the right way forward (more on this model to come). This way, funders accept an element of risk, knowing projects will fail, and trusting the intentions of those doing the work to do it with the right intentions and define their impacts in the ways they feel are most appropriate. Payment-by-results is a backward step and if government funding can’t pass the More Like People test, the voluntary sector should walk out, walk on.


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Posted in accountability and leadership + management and measurement and public sector and trust.

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More Like People is an association of freelance consultants, facilitators and trainers, working primarily in the voluntary, community and campaigning sectors in the the UK and elsewhere.