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Payment-by-results could drive out smaller charities, say leaders

Government plans to introduce payment-by-results for providers of children and young people's services could jeopardise early intervention work and drive small charities out of business, sector leaders have warned.

The Conservatives mooted plans to expand the use of payment-by-results in public service delivery before the election, since the system has been employed to incentivise health and welfare-to-work providers for some time.

Junior children's minister Tim Loughton said at a conference last week that the Department for Education is "investigating" ways in which to use payment-by-results to improve cost-effectiveness in children and young people's services. "That's only right and sensible, particularly in current circumstances," he said.

Justice Secretary Ken Clarke announced also last week that payment-by-results would be used to help rehabilitate offenders. But the model would be new to wider children and young people's services.

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