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Subcontracting under TR

Transforming Rehabilitation has created a new and very different commissioning environment for voluntary sector organisations who deliver services to offenders, either in prison or the community.


New providers and sub-contracting arrangements

Market stewardship

Payment mechanism

Further information

New providers and sub-contracting arrangements

The new contracts of probation services involve 3 'tiers' of potential providers:
•    Tier 1:  Owners of the Community Rehabilitation Companies (CRCs) and ‘lead providers’
The new contracts for the delivery of probation services under Transforming Rehabilitation across the 21 contract package areas have been signed. For a list of the new owners of each CRC click here. You can also download an interactive map showing the new owners of the CRCs and in case of interest a list of the 30 who originally entered the competition. You can download a list of contacts for the voluntary sector to engage with Community Rehabilitation Companies here.
•    Tier 2 and 3: Subcontractors
Each CRC will develop a supply chain in the months and years to come, which will consist of a range of sub-contracted providers that have often been referred to as Tier 2 and 3 organisations.

It's not yet entirely clear what the distinction between tiers 2 and 3 is or what the contracting arrangements with them will be, including how long contracts will be for, and this is very likely to vary across the CRCs. Tier 2 is likely to be larger voluntary sector organisations, mutuals or other private sector organisations, providing a significant volume of services over a larger area.  Tier 3 is likely to be made up of smaller, local and community organisations.

The Ministry of Justice (MoJ) and the National Offender Management Service (NOMS) have expressed a clear desire to see the voluntary sector play a full role in the new arrangements, stressing that this could be as a subcontractor in another organisation's supply chain or as part of a consortium arrangement.  CRC owners were required to provide evidence in their bids of how they will build and sustain partnerships working with local organisations.

Clinks have produced a range of legal support resources for voluntary sector organisations subcontracting under the Transforming Rehabilitation programme.

Market stewardship

To protect and strengthen the position of Tier 2 and Tier 3 providers in the current market, the MoJ and NOMS have drawn up a set of market stewardship principles, which can be found in the Principles of Competition document and an Industry Standard Partnership agreement (ISPA). Tier 1 providers will be required to sign an ISPA with Tier 2 organisations in their supply chain, and it is intended to be seen as good practice for working with Tier 3 organisations.  

You can read the latest draft of the ISPA published by MoJ here. The final version however has not been published due to commercial sensitivities. Read Clinks’ briefing on the ISPA. It’s also important to note that this is the version of the ISPA that will apply specifically to TR.

A draft of a generic ISPA, designed to cover all future subcontracting arrangements for MoJ projects, was also published previously, and put out to consultation. Clinks' response to that consultation can be found here, but please do note that these are different documents.

You can read Clinks blog on whether TR gives a fair deal to the voluntary sector here.

Payment mechanism

The level of payment for the new Tier 1 providers will be dependent on the reduction in reoffending they achieve.  Contracts will combine a 'fee for service' and a 'Payment by Results' (PbR) element.  To receive the full success payment, providers will need to achieve both an agreed reduction in the number of offenders who go on to commit further offences (the binary metric) and a reduction in the number of further offences committed by each offender they have worked with (the frequency metric).  

You can read an outline of the payment mechanism, which will govern how payment is made to lead providers, including the Payment by Results element of the scheme can be found on the MoJ website.

Tier 1 providers may choose to pass some of this Payment by Results element on to their subcontractors, or they may offer them a more straightforward fee-for-service. The market stewardship principles include not passing risk down supply chains disproportionately.
Payment by results will come into operation in late 2015.
You can read Clinks blog on whether TR will promote desistance and how will it be measured? which includes information on the payment mechanism.

Further information

For further information please see Resources and briefings on TR.

Clinks are also monitoring voluntary sector involvement in Transforming Rehabilitation. We want to know about how the new landscape is effecting your organisations, whether you have or have not been contracted to deliver services as part of it. Please see Tracking Transforming Rehabilitation for more information.