Performance payments fail to incentivise children's centres

By Laura McCardle

| 12 June 2014

A government trial exploring the effectiveness of paying local authorities financial rewards based on the performance of children's centres failed to have any significant impact, according to a new report.

A new report by Frontier Economics and the Colebrooke Centre found little impact in using performance-related payments in children's centres. Image: Jason Bye.

An evaluation of the Department for Education’s payment-by-results (PbR) in children’s centres trial concluded that reward payments for the scheme – which involved 27 local authorities between September 2011 and March 2013 – were too low to incentivise participants to achieve all the targets.

The study, carried out by Frontier Economics and the Colebrooke Centre, shows that the PbR model had some impact, including encouraging a greater focus on the core purpose of children’s centres, but it failed to raise awareness of the centres among local politicians and council officials outside of early childhood services.

The report, published on Wednesday, says: "It shows that money itself is unlikely to have an impact on local authorities and reward payment amounts must be sufficiently high to generate an incentive."

The participating authorities trialed two different methods – a national and a local approach. The national element of the trial – the DfE’s main focus – saw government officials set improvement targets, paying local authorities if they met those targets, while the local element saw local authorities design their own PbR scheme.

The aim of the trial was to establish whether a PbR method would raise the profile of children’s centres and the use of early intervention, as well as whether the model provided an effective incentive to change local behaviour.

Nick Davies, policy manager at Children England, has welcomed the report.

He said: “Perhaps the most important finding is that it is not financial rewards that motivate practice among those delivering services to children and families.

“This is a profound challenge to many recent ‘innovative’ funding initiatives that have attempted to use financial incentives to drive public service improvement.
“Children’s services work best when they are collaborative, yet PbR and contracting practice in general either struggle to measure or actively discourage such behaviour.”

Anne Longfield, chief executive of 4Children, the government’s strategic lead on early years, said the DfE stopped the trial because ministers did not want to take the model forward.

She said: “We were pleased that the department concluded the trial.

“We now think they need to focus on other wider outcomes of children’s centres for children and families – it’s something the education select committee proposed and we think there are real merits in exploring this.”

In April, research by the National Council for Voluntary Organisations found that the PbR method was putting off many charities from bidding to deliver government programmes.

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