21 September 2011
GHK (www.ghkint.com) is an independent, employee-owned public policy research and evaluation company. As such, and for a number of years, we have been supporting clients at European, national, regional and local level to assess and/or evidence their economic and social outputs, outcomes and impacts as the basis for investment, funding and commissioning propositions. To some, there exist a bewildering array of approaches, tools and metrics to measuring such achievements but for specialist evaluators these are, essentially, variations on a theme.
One evaluation example for the sector is GHK’s (2010) National Evaluation of Community Development Finance for BIS and the (then) Cabinet Office of the Third Sector[1]. There is no doubt that the evidence base produced has been critical to the success of the subsequent CDFA application to the Regional Growth Fund (RGF) to create a £60m Wholesale Fund for enterprise lending.
A very recent, and arguably radical, development is the use of evaluation evidence bases in the movement to Payment by Results (PbR, also known as Payment by Outcomes). Fundamentally, this involves commissioning contracts where payment is made for results or outcomes achieved. This is in contrast to payments on spending returns based on activities undertaken, or even outputs. The Peterborough Prison Social Impact Bond is one example of PbR and others include those signed with major employers on apprenticeship training, on worklessness initiatives and, in what might be argued to be the ultimate test of their potential, on early intervention services to ‘chaotic’ families.
The evidence base for such contracts will test evaluators, investors, commissioners and providers alike but, at the same time, offer new and substantial opportunities across the full range of services provided by the CDFI sector including, for example, financial inclusion activity. GHK is involved in evaluating these latest developments for clients such as the Crown Prosecution Service and, in addition, we have produced a number of Briefing Notes, Guides and Toolkits.
One of these Briefing Notes is on Payments by Results [download here]