In the third of our ‘TR So Far’ blog series, we reflect on the question that’s perhaps most pressing for Clinks Members contemplating, or already in the process of, work with a Tier 1 (prime) service provider under Transforming Rehabilitation: can the Sector expect a fair deal?

Clinks Director Clive wrote in the Guardian a few weeks ago about some of our concerns for the Sector, especially smaller organisations. This blog expands slightly on some of these, and also gives an update of the discussions taking place about the future of how payment-by-results (PbR) is going to look in practice.

Although we are still waiting for the next stage of the competition before we’ll have any new information, last month the Ministry of Justice published an important new document: a brief outline (PDF) of their current thinking about the future of the payment mechanism. Key developments include the possible removal of the foundation payment: the amount that providers would expect to receive for hitting their PbR targets, which the MoJ had been planning to pay upfront and then claw back if necessary.

To mitigate the likelihood that this will cause cash flow problems as providers wait to receive their payments retrospectively instead, the MoJ are considering introducing an initial period at the start of the contracts before PbR kicks in at all. We would expect to see Tier 2 and 3 given the benefit of this window too, and will of course make the case for this window to be meaningful in length.

But we are also making the point that this additional potential challenge increases the need for clarity around how much risk can be transferred to Tiers 2 and 3 in the first place. This is something we have called for in all our responses to government, and mentioned in the previous two blogs in this series. We are hoping to see this taken into account when the Industry Standard Partnering Agreements (ISPAs) are released at the next stage of the competition, and that at the very least these require the Tier 1s to stipulate how much risk they intend to pass down.

And all of this, once again, brings us back to the matter of grants, and the questions that still hang over these, as outlined by Jess in the first of this blog series. There will be a need to support Tier 1s in grant-giving good practice, especially around the size of grants, proportionate application and reporting processes and so on – and Clinks is also arguing that this would be a good opportunity to support those VCSE organisations that deliver interventions to promote intermediate outcomes. By definition, because these interventions are holistic, individualised and incompatible with fixed timescales for reduced reoffending, these interventions will struggle to be part of a PbR system - which may then put long-term investment in assessing these outcomes at risk. Grants from Tier 1 organisations could hence fill a vital gap.

Other aspects of fair partnering with the Sector include the length of contract Tiers 2 and 3 will be expected to take on, and the risk of volume fluctuations outside of providers’ control. Again, the key consideration here is transparency: Clinks would like to see the ISPAs include refresh points and commitments on not penalising the Sector unduly if the number of referrals dips.

In addition to all the above, we are of course keeping an eye on the overall future of the Sector as the new service landscape develops. While Tier 1s will of course be keen to ensure value for money in their supply chains, what is the place of social value in commissioning? For example, will Tier 1s ensure that community-based organisations are not pushed out of the market? Related concerns include the timing around the new contracts: how long after negotiations will they actually go live - and what will happen to services in the interim?

Looking beyond the role of Tier 1s, what opportunities will the formation of the new National Probation Service offer for VCSE organisations working with high risk prisoners? Will non-resettlement prisons still be accessible to those working with long-term prisoners? And finally, as we begin to contemplate life after all these changes have settled into place, what does the future hold for the Sector’s vital role as an independent voice for best practice, emerging policy issues and long-term criminal justice reform - will this continue to be supported and facilitated?

As ever, Clinks Members’ and readers’ views on all of the above are sought, so please leave a comment below.

Don’t forget to read the other blogs in our ‘TR So Far’ series:

TR So Far (1): The Known Unknowns

TR So Far (2): Will the reforms promote desistance and how will this be measured?