My Lords, another aspect of the Government’s proposals is the development of payment-by-results programmes. I will begin by quoting the report of the Justice Select Committee in August 2012. The committee said, of contracting out on a payment-by-results basis, that,
“we are not convinced that the Department has the necessary commissioning and contracting capability to achieve its objective. Currently its commissioning processes are often poorly designed, the stages involved do not whittle down contenders appropriately and bidders do not receive sufficient feedback at the end of the process. Furthermore, the potential benefits of payment by results programmes may not be realised because of structural problems in the Department and the National Offender Management Service”.
That was as recently as August last year. Will the Minister say to what extent these matters have been considered by the department, to what extent the situation has now improved and in what respects it has improved? It was a fairly damning indictment by the Justice Select Committee.
There was some discussion of this issue at Second Reading, and many questions were asked. The Minister—I think it was the noble Lord but it may have been his colleague—said then that discussions were taking place with potential providers. It would be interesting to know at what stage those discussions now are. What is the basis on which a payment-by-results scheme will be made? We have heard various suggestions that there will be a flat fee, which will be topped up by some kind of bonus. However, that is likely to be modest in relation to the total cost of the service. If it is not modest, will contractors take the risk? Who knows on what basis this will happen? There is very little about this—of course—in the infamous impact assessment. Will the noble Lord indicate what percentage of the total cost the Government consider will be paid by way of bonuses?
There are more questions to be asked. Will the scheme be the same for all offenders? We heard yesterday—I think for the first time—about the concept of cohorts, to which reference has already been made. The idea is to not look at individual cases but to take a
whole group and study the reoffending rates—or rather, as we heard earlier by way of clarification, the reconviction rates. However, we do not know for what period that will apply. Will results be judged on a year’s basis, or will any offences taking place over a period of, say, two or three years—which one might have thought would be a more reasonable approach—be taken into account? If so, how will they be taken into account? It will not do for the Government to say that they do not yet know because they have not reached a conclusion with the contractors. They ought to know the basis on which they are advancing the new policy, and they ought to be able to tell your Lordships’ House—and, indeed, the world at large—about what they are doing.
Serious criticisms of this process have come from a variety of sources. The director general for public services at the Treasury said:
“We have now got a situation at the Ministry of Justice where Chris Grayling … is going to take a payment by results approach to almost the whole of probation. But some of us who have been around a long time get very nervous about panaceas … It is quite hard to get a firm handle on the numbers”.
I suspect that she is not a paid-up member of the Labour Party, or even of the National Association of Probation Officers.
The National Audit Office commented on the aim of getting smaller organisations involved—which is, as ever, one of the more attractive features that the Government wish to promote, although it turns out that they are doing so more in theory than in substance. The National Audit Office said:
“It is likely to require significant efforts by the Ministry for it to achieve its aim of creating a diverse and sustainable market, at least in terms of prime providers”.
At the risk of cherry picking, it said,
“the use of a binary measure could encourage providers to concentrate their efforts on the offenders least likely to offend and prevent them from working with the most prolific offenders”.
It is not clear how the cohorts are going to be made up. The noble Lord will no doubt say the matter will be resolved. Can he give any indication of how the cohorts are to be composed?
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It goes on:
“The measure of success—whether someone is reconvicted within a year or not—is crude”.
It is worse than that. It is not whether someone is convicted, it is whether a proportion of the cohort is convicted.
“Offenders usually desist from crime only after many twists and turns. Firms could have an incentive to cream off the easiest cases and keep offending quiet”.
Actually, that was not the National Audit Office, I beg its pardon. That was the Economist—again, not a particularly left-wing publication. The Economist carries on:
“Big companies and charities find it much easier to risk non-payment than smaller ones, yet small, local groups are often the ones with the knowledge and networks”.
That is precisely my point about locality which will almost certainly be sacrificed in the course of this reckless proposal, if it goes further.
Then there is the question about who is to be dealt with under the 12-month short sentence category. I asked this question at Second Reading and we do not
have a reply. Is every motorist, non-violent offender or person committing a minor offence who goes in for less than 12 months to be offered supervision? The implication yesterday at the meeting with the Secretary of State is yes, but the contractor will decide what sort of supervision to apply. There is bound to be a cost to that. They are going to price that in. What is the point? There ought to be some clarification about who is likely to fall into this category.
Not the least worrying feature is the unanswered question which I asked in the Queen’s Speech debate and again at Second Reading. Why did the Government stop the pilot schemes in Staffordshire, the West Midlands and Wales, and why have they refused a freedom of information request to disclose the evaluation of those schemes? We really are entitled to an answer to that. If the Minister cannot supply it tonight—I am not blaming him personally—I expect a reply in writing from him once he has taken whatever advice he needs about this. This is pretty fundamental. Why is Parliament so far being denied the reasons for that decision and the evaluation of that pilot which took place?
There is another organisation—DrugScope—which has commented in an interesting way about the proposal. It is not completely opposed to the notion. However it recommends what it describes as a cautious and gradual transition. It talks about the need to accumulate evidence and for stocktaking in the light of experience. It suggests that only 10% to 20% of the workload should be subjected to payment by results in the first phase. It is taking a less oppositional view than mine and that of my colleagues on this matter. Are the Government disposed to listen to that point of view? If not, why not? These people are not as opposed to it as some of us necessarily find ourselves. Incidentally, this is an organisation which has been mounting pilots of its own in a different area of policy, in drug and alcohol recovery. It started pilots in 2012. The project is being monitored and evaluated by Manchester University in a three-year study. DrugScope’s recommendation is reflected, in part, in my amendment, which refers to a three-year period. Incidentally, I did not know when I tabled the amendment that this other experiment, as it were, was being piloted. It was fortuitous that I proposed the same period as that endorsed by DrugScope, but it seemed to me a reasonable one.
If the Government wish to proceed on these lines, why will they not follow what they are doing—or helping to be done—in the not unrelated field, as it turns out, of drug and alcohol recovery? Why do they not follow that example, pilot it properly and then proceed if the evidence supports following that approach? It is troubling that so little has been disclosed about what is in the Government’s mind in tackling this issue—if anything is in their mind—and how their policy might impact on a crucial service. I hope that the amendment’s aim of piloting proposals properly before rolling them out will, on reflection, commend itself to the Government. It is a much better way to approach this problem. The Government clearly wish to pursue the concept of payment by results, about which many of us have doubts. However, we might be convinced by the evidence of properly evaluated pilots. I beg to move.