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1 Issues Issues provides briefings and reports on areas of policy, practice and the operating environment affecting the voluntary and community sector in Greater Manchester AND JUSTICE FOR ALL? 33 In response to the Government's consultation on its Transforming Rehabilitation proposals, GMCVO has developed this discussion paper to help inform the debate This paper seeks not to consider the merits of reform of the criminal justice system (CJS) but to consider the implications of such reforms for voluntary sector organisations and the communities they serve. An attempt is also made to understand how these reforms will impact upon the emerging public service delivery structures in Greater Manchester. If we are to maintain the confidence of the public in the criminal justice system it is essential that the detail of implementation of these proposals does deliver justice for all. There is an opportunity in any system redesign to address historic inefficiencies and inequalities but also a risk that without careful preparation and implementation, good practice is lost and new inequalities generated. Clearly GMCVO welcomes the opportunity for the sector to influence proposals at this stage and to inform such planning and preparation. This paper should not be seen as a direct response to the proposals but an attempt to inform the debate. We are interested in a dialogue with any organisation that might add supporting information to any points or provide a critical perspective of our analysis. Issues raised by this paper include: Whilst many in the sector have given a cautious welcome to the opportunities the proposals may generate, it is important to recognise that the proposals will also present a range of challenges to many providers. However, the impact of these proposals on the communities we serve, rather than our own organisations, should guide our responses to this consultation. The significant changes to state commissioning will require significant changes to voluntary sector provision. Organisations will have to make significant changes to their operations and will need strong governance and effective user engagement. It should also not be assumed that existing providers will be the providers of the future. In the competitive market implicit in the proposals organisations will often be required to choose between delivering at scale or value. Delivery at scale will require organisations to be of a significant size and able to mobilise capital. To deliver value organisations will need clear market differentiation, expertise and specialism. Many organisations engaged in the Work Programme have encountered difficulties in providing a service through spot purchasing mechanisms. Many voluntary organisations may need to redevelop their business models in order to engage with such mechanisms and may need external support. The design of a payment by results model will inevitably result in an incentive to target resources where they may generate the greatest return. An inexpertly designed model may result in unintended consequences and without careful development of these proposals we have concerns that existing inequalities with our neighbourhoods may be further amplified. Many offenders have multiple needs and may require complex interventions. These services, such as the delivery of mental health services, may necessarily be commissioned by other public sector bodies and so commissioning needs to be integrated. We believe that the introduction of Police and Crime Commissioners (PCCs) should provide opportunities to realise this.

2 Introduction On its record so far the current Coalition government has been the most radical and reforming government many of us will ever have experienced. A number of areas of state delivery have seen structural reform at a scale which not only changes service delivery significantly but embeds change in a way that is not easily reversed. With much of this change we are at too early a stage to really understand the long term impacts on society and its relationship with public service provision. Secretary of State for Justice, Chris Grayling has presented a set of proposals to reform the provision of the supervision and rehabilitation of offenders that is no less radical than the reforms of education, health and support into employment. The proposals, in the Transforming Rehabilitation paper, seek to significantly reduce the direct role of probation trusts and open up delivery of rehabilitation to a more diverse range of providers through market models. The Secretary of State has made the point that the expectation is not that significant improvement to rehabilitation be made across the board but that these proposals will seek to generate better value for the taxpayer. The belief is that savings generated will allow the supervision of offenders to be extended to those who currently leave prison after serving a sentence of less than 12 months. This group of offenders currently receives little to no formal support on release but is also the group most likely to reoffend. Purpose of this paper This paper seeks not to consider the merits of reform of the CJS but to consider the implications of such reforms for voluntary sector organisations and the communities they serve. An attempt is also made to understand how these reforms will impact upon the emerging public service delivery structures in Greater Manchester. This paper will: Describe the proposals from the MoJ and provide a broad overview Explore issues related to payment by results (PBR) delivery Identify lessons learned from the DWP Work Programme particularly in relation to pricing Seek to understand the impact on inequalities Explore how these reforms might link to wider public service reform within Greater Manchester particularly with regard to the Whole Place Community Budget programme Provide recommendations on how best the proposals may be implemented We would recommend though that readers unfamiliar with the proposals take the time to read the Transforming Rehabilitation paper and encourage all to respond to this consultation. The deadline for any responses to the consultation is 22nd February Details of the proposals can be found at the Ministry of Justice (MoJ) website, here: We also recommend the briefing on the proposals produced by Clinks, a national voluntary sector infrastructure organisation that supports sector engagement in working with the CJS. Their briefing can be found here: 2

3 The proposals The proposals from the MoJ seek to: Open to competition the bulk of services for low to medium risk offenders currently delivered by probation trusts. This commissioning will be managed nationally but aligned to PCC boundaries in order to support alignment of services Introduce the use of PBR into the delivery of such services Increase the use of mentors who will signpost offenders into rehabilitative activities Extend statutory supervision to offenders released from short-term sentences, who currently are released unsupervised Limit the activity of probation trusts, as currently constituted, to the assessment of offenders and the supervision of those who present a high level of risk to the public Some elements of these proposals may seem familiar to many in the voluntary sector as a large number of organisations already work with clients to seek to change behaviour and rehabilitate in the widest sense of the word. However, it needs to be noted that few voluntary organisations are engaged in supervision of clients to the degree envisaged by these proposals. Indeed many organisations will already have concerns in engaging with criminal justice services because of the compulsory nature of this work. To actually go one step further and take responsibility for this supervision, rather than just work with a statutory partner with such a duty, will not just require an expertise not present in organisations but may also be seen to compromise organisation values. The likelihood then is that where local voluntary organisations do engage in this work it will, with a few exceptions, be as a subcontractor supporting the rehabilitation element rather than as a prime contractor. A concern here is that the proposals refer to delivery agencies providing mentors and signposting to services aimed at employment, accommodation, training and tackling addiction. This assumes that some services will exist outside the remit of the service contracted and will be able to accept referrals from such signposting. The difficulty here is that there are already significant service gaps and with reductions in spending by many public sector agencies these gaps may grow. Through work in the Transforming Justice pilot in Greater Manchester it is clear that there is a lack of provision of support to those offenders with low level mental health and alcohol use issues. Of those leaving short-term sentences, where reoffending is at its highest, approximately 8 out of 10 have mental health or substance use issues. Many of these do not meet the thresholds needed to trigger NHS interventions and so are unlikely to receive support. In addition the work in the Transforming Justice programme has also identified that the chance of re-offending is reduced significantly if the offender can find stable work and accommodation. Whilst nationally employment is increasing, many areas of Greater Manchester are not seeing such a recovery in employment prospects. Add to this, significant reductions in funding for supported housing and the supply in private rented housing in many areas locally, then clearly the wider economic and social environment does not favour an increase in rehabilitative services that an offender supervisor may signpost to. The challenge many organisations will have to face in seeking to help rehabilitate offenders is that resources are increasingly less likely to be found from within the public sector. The capacity of organisations to generate resources through independent fundraising and to use volunteer activity to support their communities will grow in importance. Indeed, this would likely be the case if no structural change were proposed by the government. Therefore, for these proposals to themselves create increased opportunities for organisations to directly support the rehabilitation of offenders there will be a need to be a shift of resources into such activity; otherwise the proposals could be less an opportunity to rehabilitate and more simply an opportunity to supervise. This element itself will also create another significant challenge as such supervision is likely to face much greater scrutiny than other areas of delivery. Where failure occurs In the CJS it becomes a greater matter of public interest than in other contracted services, such as support to the unemployed. Where perceived weaknesses in the Work Programme have led to some concern amongst sections of the public, failures in the supervision of offenders might more likely lead to alarm and be of wider significance. Due to this, much stronger risk management processes will be required with organisations needing to pay much greater attention to reputation management. As an indicator of success in delivering this service it may be found that 3

4 confidence in the CJS has more import than the actual rate of reoffending. Should an organisation reduce reoffending but see some high profile failures in supervision that put the public at risk, then the service they deliver as a whole would be seen as failing. Summary: Supervision may discourage some voluntary sector organisations from engagement There are increasing gaps in rehabilitative services within the community Success may be dependent on external factors Payment by results Many voluntary sector organisations will already be familiar with payment conditional on performance. The vast majority of public sector contracts require clear outputs or outcomes in order to release payments, albeit with some level of upfront payment. However recent proposals have required contractors to carry much more risk than the vast majority of organisations will be used to, with a greater proportion of funding dependent on performance and with greater expectation of the measurement of impact. Whilst PBR is often criticised it should be understood as having no small merit in the right circumstances. PBR as a mechanism can be very useful in ensuring that resources are targeted where they will guarantee the greatest return and have the ability to create efficiencies in service delivery. However the implication of this is that in order for resources to be targeted where the greatest return may be achieved, they must necessarily be withdrawn from areas of low or uncertain return. Should this be achieved by decommissioning less successful services in favour of more effective services then this would not necessarily be of wider concern. However, there is a clear concern that contractors would be incentivised to assess offenders themselves with reference to the particular return they might generate. This process is often termed creaming and parking a process where those who are easiest to support and thus present a high profit margin are targeted for support and those hardest to support may be the last to be supported or in fact denied support. Such activity would present two clear problems. One is that the CJS must be seen to be just. To provide some offenders with opportunities to change and rehabilitate yet deny such an opportunity to others would not be just and would potentially change the relationship between the public and the justice system. As PBR inherently creates an incentive to cream and park it is essential that targeted services are available for those hardest to support who may present little incentive to PBR providers. In addition, many PBR schemes have faced two significant challenges. Firstly, how to measure success and secondly, how to attribute rewards for success. Both issues, if handled incorrectly can incentivise activities which the service commissioner would not have intended. Previous PBR schemes within the CJS have primarily focused on a binary measure of re-offending, i.e. rewards can only be achieved if the offender does not re-offend within a fixed time period. This approach has been criticised as it does not recognise that an offender may be committing less serious crimes which cause less damage and trauma to victims and that such lower level reoffending may point to changes in behaviour which over the long term may see offending stop entirely. Also where an offender has multiple needs then more complex and time intensive solutions may be necessary. There may be less incentive to deliver these interventions if there is little chance of progress over time being rewarded. There is clearly a balance to be made between rewards which reflect the cost to the CJS of processing offenders and in incentivising work with those who require more intensive action. We believe that such balance needs measures of progress triggering reward that are more nuanced than a simple binary offending measure. The complexity of needs and necessary interventions also generates issues related to the attribution of success. With many offenders living chaotic lives and with issues relating to health, employment and housing needing to be resolved if offending behaviour is to be addressed, then multiple organisations may need to be engaged if success is to be achieved. The complexity of interactions between these services may restrict the ability of any individual provider to accurately demonstrate their impact in these situations. In addition, with some of these complexities the services having the greatest impact on offending may lie outside the contracted rehabilitation 4

5 service. Ideally PBR schemes would be simple and limited, reducing the need to address such complexities or would need to be comprehensive enough that the significant range of influencing factors would be linked into the service. Whilst no MoJ-specific contract could deliver this, it would be possible if such commissioning was undertaken jointly with other service commissioners. Summary: PBR can target resources efficiently but can also lead to service withdrawal To maintain confidence in the CJS there is a need to ensure all offenders have support Simplistic measures of success may discourage providers from working with those most at risk of reoffending Where needs are complex and where multiple interventions are delivered success will be difficult to attribute Work Programme It is inevitable that the view of any forthcoming PBR programme will be compared to the DWP s Work Programme (WP) and voluntary sector experiences with prime contractors. There has been a broad debate on the extent of WP prime contractors subcontracting with the voluntary sector with many organisations having poor experiences of the process. GMCVO s experience in negotiating with WP primes has been that whilst there has been a willingness to explore potential avenues of engaging voluntary sector providers in services, most primes have lacked the capacity to manage the complex supply chains needed to deliver this in practice. We also believe that few voluntary organisations will be able to act as prime contractors due to the capital requirement needed on a significant PBR contract. For the main part, and especially for the bulk of the sector, engagement with the emerging offender rehabilitation market will be through subcontracts. It is GMCVO s view that the manner of the competition for WP prime contracts led to management costs being squeezed significantly. Whilst central commissioners may believe that this secured the work at a good price we believe that this limited the ability of primes to manage complex provision. It is inevitable that if any prime contractor is to be able to manage a complex supply chain it will need to invest in management capacity. With bureaucracy often being viewed as waste we believe that the current environment is not conducive to such investment. There has been a significant volume of subcontracting by WP primes but often this has occurred by primes subcontracting areas of delivery at scale to generalist providers. This has been supplemented occasionally through spot purchasing. Whilst some voluntary sector organisations are able to provide competitively through these mechanisms, the majority of providers already delivering in partnership with the CJS will lack the size to be able to deliver at scale on a first tier contract and may lack the business mechanisms to be able to engage in spot purchasing. Organisations may seek to deliver through collaborative mechanisms in order to generate scale but again, without supply chain management costs built into the prime contractors business model, such mechanisms may not be viable. If these proposals result in delivery built around principles similar to the WP then it may well be that spot purchasing may be a more viable model of sourcing services from the voluntary sector. In that case many current providers may need to reengineer their business models or new providers sought elsewhere in the sector. Through local research we estimate that 78% of the voluntary sector in Greater Manchester receives no public funding at all and is not engaged in the delivery of public services. Often these organisations are small and whilst not able to deliver at scale may be well suited to delivering small levels of service on a spot-purchase basis. Therefore when seeking to understand the market supply it is important that the focus does not lie just on existing providers but also on how new providers might grow into these new areas of delivery. Following this, if attempts are made to grow and shape the market supply it is also essential that the scope of this work is not solely restricted to existing providers. Indeed it may be that a proportion of existing providers are unable to adjust to not just the change in the nature of provision but also to the changed economic environment, and that new sector provision may be necessary. Summary If voluntary sector providers are to be involved extensively then prime contractors need incentives to build 5

6 supply chain management capacity Collaborative mechanisms that allow providers to deliver at scale will also need their management costs built into the service price If support is given to the sector to adjust to new delivery models then there should be an awareness that delivery may be sourced from providers not currently engaged with the CJS Inequalities In the Transforming Justice pilot in Greater Manchester, GMCVO led the development of the strategy on the point of release. In this strategy we identified clear evidence of offenders having a range of complex needs. This included the following analysis: The odds of offending were increased by 42% if prisoners reported both employment and accommodation problems on release (Resettlement Survey Reconviction Analysis 2008). The barriers that many offenders face often include poor skills, poor or non-existent employment history and poor health including mental health, drugs and alcohol issues. Evidence (Condon, Hek and Harris 2008) indicates that the health of offenders both in and outside of custody is significantly worse than the nonoffending population and that currently many offenders are not in receipt of an equivalence of service in relation to their health needs. Nine in ten prisoners have at least one mental health or drug problem. A quarter have a longstanding physical disorder or disability and nearly two thirds admit to heavy drinking and/or taking drugs. Greater Manchester is in particular disproportionately affected by alcohol related harm. Latest figures (Sept 2010) indicate that five of the ten most affected boroughs nationally are within GM. In addition there are wider health gains to be realised by targeting offenders; for example, 83% of offenders smoke compared to 22% of the general population (Brooker 2008) and drug misusing exprisoners have a high risk of drug-related death in the first two weeks of release (Shewan 2001). mental health and substance use issues are likely to be below thresholds which would trigger medical intervention despite these issues being factors influencing their behaviour. Our concern is that those with the greatest need would present a prime contractor with little opportunity to gain a return on their investment. Even in a contracting environment where a premium might be awarded to the support of such an individual, the likelihood of failure might be too great for a provider to consider working intensively with them. This would be particularly the case if essential services were provided by other public sector commissioners. So, for example, if local health commissioners did not invest in appropriate mental health services then the ability of a rehabilitation provider to reduce reoffending would be reduced. Many offenders have lived chaotic lives in geographical areas blighted by inequality and a proportion of these will face significant challenges in addressing their behaviour. With many inequalities in provision and outcome already existing, a market mechanism that moves resources from those with less chance of generating a return to those less likely to provide a positive result may simply amplify such inequalities. Should a significant skewing of delivery occur away from those with complex needs and by implication away from neighbourhoods where offending is more widespread, then there would be significant local implications. Summary Those facing the greatest levels of inequality and who are at the greatest risk of reoffending often need the most support and investment of time pricing must reflect this Risk of failure is increased if other service commissioners do not seek to provide offender appropriate services this would reduce incentives to engage with offenders with the most complex needs Neighbourhoods which already see significant inequalities in outcome may see further inequalities in attempts to rehabilitate. Many offenders clearly have much worse health than the general population and are less likely to be receiving appropriate medical attention. Their 6

7 Public service reform Within Greater Manchester there has been significant progress towards developing new delivery models that seek to reduce demand on services and thus generate greater savings to the public purse alongside the key aim of improving outcomes for the citizens of the city region. Greater Manchester was one of four areas to be awarded Whole Place pilot status and thus gain direct support from a range of central government departments in the redesign of local services. In particular GMCVO has led on initial strategies linked to the point of release, particularly with reference to offenders released from short-term sentences without statutory supervision. It has been clear from this work that the CJS alone cannot deliver a reduction in re-offending. Many individuals needing support have a complex set of needs and often have chaotic backgrounds. In these situations their engagement with the CJS is just the latest point in a range of public sector interventions. It becomes clear from this that if the CJS is to be successful in changing the behaviour of those it supervises, then it must do so in a wider context. If services are designed in isolation we may see a fragmentation of the system rather than a necessary integration. The proposals recognise this to a degree by ensuring that service boundaries are co-terminus with Police and Crime Commissioners and by referencing the need to enable some cocommissioning of services. However the central commissioning of such services may still result in fragmentation and/or duplication if there is either no investment in the capacity of central commissioners to understand the local service architecture or no ability for local commissioners, such as the PCC, to engage with central government in specification design. Indeed with the development of new, locally accountable commissioners with a lead on issues related to crime it may well be an opportunity missed if they are not engaged in the commissioning of supervision and rehabilitation Summary Rehabilitative services cannot be efficiently delivered without some level of integration with local delivery models Central commissioning needs to be influenced by local knowledge in order to avoid fragmentation and/or duplication Moving forward If we are to maintain the confidence of the public in the CJS it is essential that the detail of implementation of these proposals does deliver justice for all. There is an opportunity in any system redesign to address historic inefficiencies and inequalities but also a risk that without careful preparation and implementation, good practice is lost and new inequalities generated. Clearly we welcome the opportunity to influence proposals at this stage and to inform such planning and preparation. These proposals present significant challenges to the voluntary sector in addition to potentially providing opportunities. However, the impact of these proposals on the communities we serve, rather than the commercial impact on our own organisations, should guide our responses to this consultation. Organisations that do not seek to play a role in direct delivery within the CJS but which support affected communities and service users should therefore have an important role in the shaping of the debate in the voluntary sector around the proposals. We may need a reshaped voluntary sector if local organisations are to participate in the delivery of these services. Organisations may need to make a decision whether they deliver on the basis of scale or value. Each has implications. Delivery at scale may need organisations to make hard decisions about their engagement in the statutory supervision of offenders. Those seeking to deliver specialist provision will need different business models with spot purchasing likely to increase in prominence requiring organisations to be able to price services per unit and understand how they might manage irregular volumes of demand. It may well be that existing providers are not a good fit for this market and future provision may need to come from small orgs growing into this market rather than existing providers adjusting. This is often seen in the private sector, especially in retail, as former household names are replaced by younger organisations with business models better suited to the prevailing environment. We do not expect to see such dramatic change across the whole of the voluntary sector as many organisations have a greater resilience due to having strong bonds with the communities they serve. Even so, to adapt to a changing environment, such organisations may need to significantly change their manner of working. 7

8 Strong governance and engagement with service users will be vital if this is to be achieved. Those organisations concerned with inequalities within communities may have particular concerns over PBR mechanisms. Some of this will inevitably be shaped by experiences with the Work Programme and organisations will seek reassurance that lessons have been learned. More importantly there will be concern over the fundamental principles driving the CJS. Just as there is a natural expectation that punishment be conducted fairly and equally in a coherent manner, there should be an expectation that rehabilitation mirrors this. In order to protect the public and to retain their confidence in the system then all offenders need to face appropriate rehabilitation alongside their punishment. It is important to understand that changes in behaviour are often subject to many complex factors and many of the services needed to support change in offender behaviour will lie outside the remit of any offender management. Two issues lead from this: first that there is pressure on such provision because of economic change and as a result any contractor working on a PBR basis needs to understand how this would affect their ability to meet outcomes. Secondly it is important that the redesign and commissioning of services affected by these proposals is compatible with significant and diverse approaches to wider public service reform in Greater Manchester as local government takes a community budgets approach to delivery across service boundaries. Finally, whilst many voluntary sector organisations will wonder as to their place in a new, redesigned service and will understand that they need to demonstrate merit to gain involvement, all will be concerned if centrally designed services fragment provision and create a more complex set of commissioning relationships. We believe that the Greater Manchester Police and Crime Commissioner can play an important role in developing accountable local leadership in the commissioning of rehabilitation and its integration into the new models of delivery emerging from the Whole Place Community Budgets pilot. John Hannen Policy and Partnerships Manager GMCVO Greater Manchester Centre for Voluntary Organisation Issues is produced by GMCVO and can be downloaded free of charge from the GMCVO website at It is edited by David Sutcliffe, St Thomas Centre Ardwick Green North Manchester M12 6FZ T F E GMCVO is the support (infrastructure) organisation for the voluntary sector in the sub-region of Greater Manchester. Our aim is to strengthen the voluntary sector, build bridges with other sectors, and influence local and national policy. Our work is representing, promoting and developing voluntary organisations, working in partnership with other organisations doing similar work. Registered charity no Company limited by guarantee registered in England no Registered Office as above. Printed by phd JANUARY 2013

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