Transforming Rehabilitation

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1 Transforming Rehabilitation G4S CARE & JUSTICE SERVICES Response by G4S Care and Justice Services (UK)

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3 Introduction G4S Care and Justice Services ( G4S ) is one of the top 20 suppliers to the UK Government. Our 7,898 employees provide a wide range of custodial, detention and rehabilitation services to the Ministry of Justice (MoJ) both in custody and in the community, delivering value for money, innovation, reliability and high quality services. Our partnerships with more than 850 voluntary, community and training organisations help us provide a wide range of support programmes for offenders and ex-offenders across the UK each year. G4S welcomes this opportunity to provide a comprehensive response to this consultation and the Government s commitment to reform and transformational change proposed within this process. We particularly support the new presumption that with some important exemptions all sectors are now to be considered as potential providers of Government services and welcome the attitude that through competition, the MoJ can achieve its strategic aim of delivering better for less. 1

4 Transforming Rehabilitation It is refreshing to see a Government that does not have an ideological presumption that only one sector should run services as we passionately believe it is time to set aside us and them attitudes that have stifled innovation in delivery for far too long. We believe greater competition will have a catalytic impact on public sector delivery, by reviewing working practices; introducing greater innovation driven by a desire to compete effectively and the introduction of payment by results. This should not only reduce costs but drive more efficient and effective services, greater transparency and better accountability as well as economic growth. To attract a diverse range of providers to commit and invest in the UK, we believe the MoJ should be ambitious in its reforms and, following the consultation period, quickly progress to setting out a clear competition strategy which translates the policy framework into a long term commercial commitment that sends out an unequivocal message to the market. At G4S we support the move from Government to radically reform rehabilitation services both inside custody and within the community and welcome the opportunity to show that new providers can bring innovation and change to the resettlement arena, whilst at the same time bring increased value for money and improved rates of re-offending compared to existing provision. For example, reoffending rates for adult offenders have been largely stagnant in recent years, changing from 26.2% in 2000 to 25.4% in the 12 months ending March 2011, a reduction of only 0.8% in 11 years. We support the ambition to appoint end-to end providers to work with a wide range of partners. We believe that competition is a key driver in achieving cost reduction and service quality improvement whilst ensuring better for less. We acknowledge concerns that national commissioning can lead to loss of local input and in some cases frustrate partnership working at a local level. However we firmly believe that providers can mitigate this through effective partnerships and effective management, leading to improved service delivery and increased innovation. This opportunity for change should be grasped firmly. We believe that the current reforms could be braver in both speed and ambition and feel that there is little evidence to support the need for offender management to be split by risk. We would encourage the MoJ to be bold and run a pacey process, which selects providers in a fast, efficient manner: failure to progress would risk further destabilisation of the process. We also support the Government s commitment to payment by results (PBR) as we believe the default setting for any contract should be to link payment for public services to outcomes. However, we believe use of an absolute measure of reoffending will not deliver the change envisaged. A relative measure should be used instead to cut out the potential of external influence factors. There are particular services where an outcomes/payment by results approach can be most easily adopted- where clear and measurable outcomes can be established. We stress the need for balance and ask the MoJ to acknowledge the requirement for appropriate service fee elements in the construct of these reforms. 2

5 Key Themes Further to our specific question responses, G4S hope the following recommendations could further support the Government s transformation process: Remove constraints to provider innovation and delivery: Ensure implementation of the reforms and not stifle innovation by placing unnecessary bureaucracy in the process; for example, through the introduction of out-dated specification and benchmarking. Clearly articulate the role and define boundaries between the public sector probation service and providers well in advance of the competition process. Establish early budgets, setting out ambitions for delivery of the going concern that was the Probation Trusts - and quantifying financial parameters relating to interventions. Restore faith in the market through the commissioning process: The benefits and savings that can be unlocked by this process are dependent on political will. Market stimulation and provider involvement can only be maintained with strong political leadership which is open and transparent. Political force needs to be maintained to drive through the required changes which are, and will remain unpopular to those personally affected. Protect progress of competition: whilst we understand the requirement and time it takes to construct a single over-arching Public Sector Probation Trust, greater speed should be injected within the competition process. The cost of bidding needs to be acknowledged by the public sector given that PCP2 took over a year then was subsequently cancelled. The average cost of bidding for a Government contract is at least 50% greater than the average commercial contract. 3

6 Benefits At G4S we believe that the benefits obtainable through this reform are significant, and if managed well can achieve: Value for money and better for less: CBI estimates that the cost savings derived from outsourcing to the private sector are more than 20%. MoJ have already acknowledged that each time they have gone through a major outsource, savings have significantly exceeded their expectations. Irrespective of the PBR element in this reform, spending review ambitions can be achieved from the competition process alone. Consistent delivery in the end to end offender journey: For the first time there is the opportunity for the offender to have a single point of contact throughout their journey from release from custody to stabilisation. Evidence has shown what works to reduce reoffending is the joined up co-ordination of a single plan to obtain primarily: a job, a house, a stable relationship and support to deal with debt. The recent NOMS publication on offender segmentation supports this holistic approach to offender engagement, noting that programmes that tackle just one risk factor are unlikely to make a difference by themselves. Interventions that target multiple factors are more likely to be effective. This reform will integrate these services through a process and scale never been seen before. Significant increase in service offer: For a reduced budget, the offender management process will be opened up to incorporate those sentenced to less than 12 months. This group contains the most volatile offender group accounting for the majority of crime and currently has a re-offending rate of 57.8%. Bringing the reoffending rate of this group in line with the cohort (a reduction of 32.4 percentage points) will alone generate significant savings. Accountability and certainty of delivery: The public sector has few consequences for failure of delivery; the private sector has everything to lose. It is in our best interest to do the job effectively and on time. Innovation: PBR drives a culture of continuous improvement through innovation. For example, when bidding for the Work Programme, research showed most of the services needed to support people into sustainable jobs already existed-what was missing was an effective structure for managing and coordinating that provision. G4S introduced an innovative model in which 100% of frontline services were delivered by expert partners ensuring individual customers benefited from the most appropriate organisations and services to meet their individual needs. Partnership: G4S has extensive experience in building partnerships with the voluntary and public sectors, as well as local communities and employers- all critical to Transforming Rehabilitation. We already work with over 850 SMEs in the delivery of our contracts to the MoJ alongside our partnerships with Probation Trusts to deliver innovative solutions to reduce reoffending. These include mentoring programmes in Wales, drug rehabilitation programmes and through the gate support as public/private partnerships. This is evidence that the ambition of reform can be achieved and can work. 4

7 Call to Action Through this response, we support the Government s ambition to transform rehabilitation and call upon the MoJ to continue the process and bring forward concrete plans for change. Our call to action includes the following points on timescales which have been detailed more thoroughly at C12. n In April 2013 announce the scope of service to be competed, structure of public sector body and timetable for contract award. n Task Probation Trusts to complete restructuring by April n Commence dialogue with participants selected at PQQ to develop more detailed specifications, performance measures, and payment model by August n Award contracts April 2014 and mobilise by August

8 PART B: EXTENDING OUR REFORM PROGRAMME QUESTION B1 How can we maximise the results we get from our collective Government and public sector resources? QUESTION B2 How can we use the reform of offender services in the community to enhance the broader range of social justice outcomes for individuals? We believe that optimum results can be achieved from collective Government and Public Sector resources by the adoption of the following key principles: n Using providers as service integrators. n Policy and commissioning alignment across Government. n Shared Government targets across relevant departments and shared incentives across stakeholders. n Monitoring and predictive analytics to ensure that the service is meeting the needs of the offender landscape. n Mapping and strengthening community support. n Shared contract portfolios. Using providers as service integrators By enabling the provider to take on the role of service integrator, results can be maximised to provide the individual offender with joined-up end to end provision, including multiple Government funding streams accessed on their behalf. Policy and commissioning alignment Improved alignment at a policy development level prior to commissioning can avoid conflict when services become operational. Additionally improved co-ordination of service commissioning relative to NOMS pathway activity will lead to enhanced service offers. For example, initial design of the Universal Credit online application process further disadvantaged offenders exiting custody and entering rehabilitation projects in the community. Policy join-up would have facilitated a more streamlined approach and avoided potential delays in the system. The service integrator should have the freedom to establish a cross-department commissioning panel which reviews performance at a more local level to shape future policy thinking and strategy. Shared Government targets and shared incentives across stakeholders Stakeholders such as local authorities, police, and further education providers should also hold reducing re-offending shadow targets. This will enable a focused and combined effort, and mitigate against conflicting priorities such as caution targets. The promotion of pooled budgets at local authority level would be a natural progression to achieve the combined goal. For example, existing service provision commissioned locally can be measured for effectiveness against this target, such as DIP programmes (which are currently measured on the number of successes, the number of offenders placed into treatment, and time taken to attain treatment), holding a shadow target on reducing reoffending. Budgets can be adjusted to reflect the improvement in reoffending rates on an annual/ contract basis thereby ensuring resource follows re-offending. 6

9 PART B: EXTENDING OUR REFORM PROGRAMME Monitoring and predicative analytics Monitoring and predictive analytics could ensure that the service is meeting the needs of the offenders. By effective profiling of offender needs linked to programme results, community provision can be refreshed on an annual basis. This will prevent stale, ineffective services that no longer reflect offender demographics being locked into contracts. This can be managed through call-off frameworks. For example, if data shows that in Suburb A, greater reduction of reoffending is achieved by combining employment support and services to reduce gang participation - rather than employment support and accommodation support - not only can this approach be replicated, it can also inform future commissioning of accommodation-related services and enable budgets to be re-focused. Shared contract portfolios In the development of diverse supply chains to match political ambitions, commissioners should acknowledge and reward providers who have built partnerships that bring mixed portfolios of existing contracts to the table. This will ensure maximum leverage of existing Government spend and widen the potential positive outcomes for the offender. QUESTION B3 Should any additional flexibility be built into the community sentencing framework to strengthen the rehabilitative impact of community orders, and the reintegration of offenders into society? G4S thinks additional flexibility could be built into the community sentencing framework to strengthen the rehabilitative impact of community orders, and the reintegration of offenders into society: n Greater flexibility built into the community sentencing framework (and associated regulations) in relation to rehabilitation of offenders, would allow providers greater freedom to innovate. n More robustness and greater clarity could be built into the community sentencing framework (and associated regulations), in relation to the restriction of an offender s liberty, including the court requirements of each community sentence. Greater flexibility for rehabilitation Additional flexibility built into the community sentencing framework would enable new providers to redesign and innovate on the way offenders are rehabilitated. The flexibility could be introduced by: n Removing detailed performance measures Retaining the current National Standards for the Management of Offenders in England and Wales (5 April 2011) but removing the detailed performance measures of the Probation Trust Rating System. This will allow providers full scope to innovate to deliver rehabilitation. n Removing centrally devised requirements that detail the frequency an offender should be seen and what activities should be undertaken. Leaving this to the discretion of providers will enable them to respond to the changing circumstances of the offender through continuous professional assessment. This will ensure a truly individualised and tailored approach. For example, after an initial period of intervention the offender may not need to be seen so frequently. Should their circumstances then change, such as they lose their job or relapse into drug taking, the supervisor can require another period of intensive intervention to get them back on track. n Increasing flexibility for the use of accredited programmes There continues to be some good results from attendance at programmes for offenders in some segments. However new providers will need the freedom to make considered use of 7

10 PART B: EXTENDING OUR REFORM PROGRAMME these programmes rather than be required to provide specific programmes for specific offenders. This will better enable the provider to tailor provision to address an offender s individual needs. For example, women offenders may be intimidated in an otherwise all male group and the programme activity can be ill suited to their needs. In these situations providers need the flexibility to change the activity to meet the individual needs of the offender without seeking an amendment to the sentence in the court. n Enabling greater flexibility around drug and alcohol treatment requirements. When sentencing an offender to a community sentence which also includes a requirement to comply with drug or alcohol treatment, the provider should retain the flexibility to specify the precise nature and length of that treatment intervention with an independent assessment of need. n Retention of offenders in their drug or alcohol treatment pathway despite any breaches of the Community Order. This is crucial to reduce re-offending. Where a breach of Community Sentence takes place which may be serious enough to consider a custodial sentence, but where the individual is engaging well in their treatment intervention, there should be more flexible use of additional requirements. For example, an individual has been subject to a Community Sentence with an alcohol treatment requirement. They then commit a further minor alcohol related offence. As a result, they should be subjected to exclusion, curfew, prohibition, or an alcohol abstinence requirement with electronic monitoring as options, rather than extending the expensive treatment requirement. These changes to the Community Sentencing Framework will allow better reintegrating of offenders by allowing providers the freedom to respond to their needs as they change during supervision. This flexible approach will also enable providers to evolve their services as evidence of effectiveness is recorded. More robustness and greater clarity on restrictions of liberty The Community Sentencing Framework (and associated regulations) needs to provide clear requirements on the restrictions and punishment of offenders. An emphasis on what is unacceptable and necessary enforcement action is required. This can be done by: n Incorporating clear requirements into National Standards Currently the detailed requirements of the MoJ regarding the punitive elements of Community Sentences are laid out in the Probation Trust Rating System (PTRS) rather than in the sentencing framework or National Standards for the Management of Offenders in England and Wales. We propose removing the PTRS system, and instead incorporating clear provider requirements in the National Standards for the Management of Offenders in England and Wales. n Limiting requirements to elements restricting freedom only These requirements should be limited to those elements that restrict the freedom of the offender such as Curfew and Unpaid Work. n Setting up enforcement panels Consideration should be given to allowing enforcement panels to be established by providers with the public sector and possibly a sentencer. These panels could then use the greater freedoms to respond to minor infractions by imposing additional hours of Unpaid Work, or to amend the Curfew periods to target offending behaviour or support employment without having to return the offender to court. These changes will equip providers with the right guidance and discretion to manage offenders in the community. It will prevent the court from becoming over-burdened with matters that should not require their attention and resource. 8

11 PART C: SYSTEM SPECIFICATION QUESTIONS CONTRACT SPECIFICATION QUESTION C1 We are minded to introduce 16 Contract Package Areas. Do you think this is the right number to support effective delivery of rehabilitation services? Do you have any views on how the Contract Package Area boundaries should be drawn? We recommend that 10 CPAs could be used for commissioning probation services. These CPAs should map directly onto the areas formerly known as Government Offices for the English Regions (GORs) with the addition of Wales as its own CPA. These GORs map accurately onto other regional boundaries that will improve the efficiency of delivery, including (but not limited to) Local Authority areas, Police Authority areas, Work Programme areas, and PCC offices. Government Office Regions, as the basis for CPAs 9

12 PART C: SYSTEM SPECIFICATION QUESTIONS CONTRACT SPECIFICATION The benefits of larger geographical areas When deciding how many Contract Package Areas (CPAs) to introduce, the key consideration is striking the right balance between localisation and scale. There are considerable potential benefits in terms of efficiency and performance to delivering probation services over a larger geographical area. These are set out below. Encouraging higher investment The size and scale of each CPA would ensure that there are enough referrals of offenders to encourage each successful provider to invest heavily in developing their services. If CPAs are too small, the incentive for providers to build and subsequently expand strong partnerships and networks at all levels of their supply chain would be weakened. Reducing complexity of interfacing with multiple providers It is crucial that providers interface with the relevant public bodies at the right points in order to successfully manage the risk of harm to the public. This includes (but is not limited to) prisons, IOM, Police Authorities, PCC offices and Local Authorities. By creating larger geographical CPAs, there are fewer interfaces for these public bodies with multiple providers. Instead, processes and agreements are clearer and more consistent with fewer providers. Larger CPAs will also increase the likelihood of some offenders being released by a prison into the same CPA, thereby incentivising better through the gate provision. Access to greater resources through a wider delivery partner network Larger CPAs will also facilitate greater access to specialist resources through a wider delivery network. This is particularly the case for those less common services provided by VCS and SME organisations. In a smaller CPA, it may be too costly to provide specialist services, since demand will be too low, and the market will underprovide. Larger CPAs will ensure that it is economically viable to provide these services. Better mapping to Work Programme areas Evidence demonstrates a direct link between reoffending and unemployment. Those offenders who receive an unpaid work requirement have one of the lowest reoffending rates in the cohort, at 16.3%, compared to 31.2% for those receiving supervision orders. 1 By using GORs to award probation contracts, each successful provider will be working within the same areas as existing Work Programme providers. This will enable the Work Programme prime- and sub-contractors to work more closely with probation providers, and in doing so generate better outcomes for ex-offenders. Boundaries of the new Probation Service It is strongly recommended that, if the Probation Service is to be split up regionally, these areas are no smaller than an individual provider CPA. In other words any regional divide should map directly onto the new provider CPAs without overlap. Without this providers will find themselves with a myriad of different expectations, interpretations and processes across a single contract For adult offenders starting Suspended sentence orders, 12 months ending March Proven Reoffending Tables Apr 10 Mar 11 (

13 PART C: SYSTEM SPECIFICATION QUESTIONS CONTRACT SPECIFICATION QUESTION C2 What payment by results payment structure would offer the right balance between provider incentive and financial risk transfer? The issue of payment by results (PBR) payment structures is a particularly difficult one in relation to criminal justice services. We acknowledge that this consultation response is one step in a longer process to designing the right payment model for the new system. We look forward to further discussion on this issue with the MoJ and other potential providers. Our main recommendations at this stage include: n Establishing the right split between service fee payments and PBR payments. n Using a relative measurement rather than an absolute measurement for the PBR mechanism. n Increasing financial risk over time. n Competing on quality and not price. The right split between service fee and PBR We recommend that an appropriate service fee should be provided for delivering the sentence of the court and all associated court requirements. Effective case management of offenders must be provided for all offenders at all times. This will ensure that all providers can deliver the sentence of the court, manage risk and contribute to public protection. A service fee is required to ensure that this work can be delivered. For example, if the courts make a specific requirement to address substance misuse, the provider will need the resource to ensure that an agreed minimum level of service is available to deliver this requirement. Therefore a service fee will ensure sufficient resource for effective case management and the delivery of some level of direct rehabilitation provision in order to meet requirements. Additional rehabilitative services can then to some extent be attached to the PBR element of funding. For example, payment for the delivery of specific offender-based housing services (over and above what would be universally be available) will be tied to successful outcomes. 11

14 PART C: SYSTEM SPECIFICATION QUESTIONS CONTRACT SPECIFICATION Using a relative measurement for performance We believe that the current proposed use of an absolute measurement of reoffending rates will not accurately reflect provider performance. That is, paying providers based on an overall percentage reduction of reoffending in the community. For example, it was proposed for the Staffordshire & West Midlands and Wales PBR pilots that providers put a percentage of their revenue at risk subject to them achieving a 3% percentage point reduction in reoffending in those communities. The biggest reason for the lack of support in an absolute measurement is the wider social and economic factors that can affect reoffending rates regardless of provider service. For example, police behaviour can have a considerable impact on reoffending rates both positively and negatively. This means it is almost impossible for the Authority to accurately set a fair baseline for providers. Reoffending rates are simply too susceptible to extenuating factors. An alternative suggestion is the use of a relative measurement. In this case, Provider A would be measured on their reduction of reoffending relative to the performance of Providers B, C and D. This should also include relevant social and economic weighting to account for regional variations in previous reoffending rates. For example, performance in the North West will be different to the South West due to socio-economic factors. Getting this weighting right is important to place providers on a level-footing when measured against each other. For example, an average performance from all providers would be taken, regional weighting applied, and the PBR pot would then be apportioned to providers relative to their performance against that average. Those providers performing under average do not receive a payment. Those providers performing above average do receive payment. Those providers performing significantly above average receive a bonus payment, and so on. This in turn encourages much higher investment from providers and other stakeholders. However, we do acknowledge the risk that the use of a relative measure may create a competitive tension between providers that reduces quality of delivery through less meaningful collaboration and information-sharing. This should be combated by clear contractual obligations to share data and incentivise work with offenders across regions where necessary (as addressed in our response to C5). Effective collaboration is ultimately for the good of all offender outcomes and provider services - without it performance and quality will suffer. It is in the interests of all providers to work well together. 12

15 PART C: SYSTEM SPECIFICATION QUESTIONS CONTRACT SPECIFICATION There is much debate to be had around the right measure and we look forward to considering other solutions and contributing to this discussion with the Authority. Proportion at risk should increase over time It is important to remember that this is first-generation outsourcing of rehabilitation services. Unlike with employment-related services programmes, the market is relatively inexperienced. Most importantly, relevant data and evidence is scarce. This discourages high investment in services and increases the demand for greater upfront funding in the earlier stages of the new system. Another consideration to support this approach is cash flow. If existing providers from the public, private and voluntary sectors are faced with an immediate and substantial shift from input funding to outcome funding, the cash flow implications (particularly for small, voluntary sector providers) would be very significant and could detract from the overall success of the outsourced model. The payment model needs to reflect these challenges. The PBR element should increase throughout the contracts at an appropriate rate as providers build capacity, gain experience and gather data to support the success of their services. Competing on quality not price We support the Government in its aim to generate significant savings in the current system. These savings should be decided in consultation with all relevant industry experts throughout criminal justice and procurement. We recommend that once savings are identified and a budget has been established, this budget should be fixed. There should be no scope for providers to offer discounts on price which risks compromising on quality. Instead, the Government should enable providers to compete against a fixed budget on quality alone. This will ensure they get the best quality model for the proposed price and true value for money. Choice and Competition in Public Services, published in 2010 by the Office of Fair Trading notes of the healthcare market, Competition on price may be inferior to competition on quality (with a fixed price) as the former may lead to quality deterioration, particularly when quality is difficult to observe (2010, p.8) 2 This is supported by academic evidence, which suggests that in the healthcare market, with regulated prices, increasing competition leads to improvements in quality (Gaynor 2006). 3 This in turn supports a high investment and high return model with considerable benefits for both the Government and providers. An alternative model would be to restrict the impact of price discounting to a minimum in the overall score for each tender (e.g. 5-10%) in order to focus potential bidders on protecting the public and reducing re-offending. 2 F OFT 1214 (2010) Choice and Competition in Public Services A Guide for Policy Makers p.50 3 Gaynor, M (2006) What do we know about Competition and Quality in Health Care Markets? Centre for Market and Public Organisation, WP 06/151 13

16 PART C: SYSTEM SPECIFICATION QUESTIONS CONTRACT SPECIFICATION QUESTION C3 What measurements and pricing structures would incentivise providers to work with offenders, including the most prolific? Based on our own experience of delivery, the right measurements can serve to both validate the work of practitioners on the ground and focus our thinking about effective service design. Our experience of working with PBR models on our Transitional Support Service in Wales has motivated us to design a service that effectively engages all offenders and enables us to evidence how we have achieved positive progress with them. An appropriate service fee Providers need to be committed to giving all offenders access to the provision they need to meet the requirements of their court sentence. An appropriate service fee as described in C2 should require and incentivise this agreed minimum standard. Differential payments A key way to incentivise providers to work effectively with all offenders is to pay them differently for helping different groups of offenders. This reflects the reality that more resource is needed on some groups than others to reduce their reoffending. For example, providers should be paid more for successfully helping the most prolific offenders. Splitting up the PBR funding To facilitate differential payments, it is recommended that the money assigned for PBR payments is split up into different portions to be ring-fenced for different payment groups. For example: Differential payments will encourage higher investment from providers who have the opportunity to have a greater impact on reoffending rates and as a result higher returns. This in turn gives providers greater flexibility for innovation with these offender groups. 14

17 PART C: SYSTEM SPECIFICATION QUESTIONS CONTRACT SPECIFICATION Defining payment groups Different offenders can be loosely grouped together based on a set of shared characteristics. For some of those groups it will be harder to reduce their reoffending rates than for others. The payments assigned to these groups should reflect this. Payment groups can be defined by: n Sentence requirements given by the court Grouping offenders by common sentence requirements. n NOMS pathways Offenders can be placed into payment groups dependent on which or how many pathways are relevant to them. n Likelihood of reoffending (e.g. low, medium or high). This is a simpler and broader way of grouping offenders together with corresponding low, medium and high payments. This can be determined using the Offender Group Reconviction Scale (OGRS3). There is considerable variation in reoffending rates across offender groups. For example, those convicted of domestic burglary have a reoffending rate of 48.2%, compared to 13.3% for those convicted of fraud and forgery. 4 However it does run the risk of being too simplistic with large variations of resource needed within each group. Encouraging continued work with offenders after reconviction The consultation document acknowledges that the use of a binary measure for re-offending may not encourage continued working with an offender once they have been reconvicted. We agree with this assertion and believe that without such an incentive, providers might not continue to provide quality rehabilitation services to every offender. Better alternatives include: n Binary measure within discrete time periods For example, the measure could count the number of offenders in each cohort who committed any offence in the first three months after release or subject to a community sentence, then from 3-6 months, from 6-9 months etc. By breaking up offending behaviour into separate time periods, providers would be incentivised to continue working with offenders even if they commit an offence. This is because they could be paid for their success in ceasing offending behaviour in the next time period and beyond. n Both binary and frequency In this case, payment would be based on both a binary and frequency measure. For example, a portion of the PBR fund would be paid based on whether a frequency measure was met, with the remainder based on whether the binary measure was met. It is important to note that we do not recommend this to be taken as an absolute measure, but instead a relative measure against the average performance of all providers. This prevents external factors from influencing the results. This is explored in detail in our response to C2. 4 Offender Management Statistics Quarterly ( 15

18 PART C: SYSTEM SPECIFICATION QUESTIONS CONTRACT SPECIFICATION QUESTION C4 How should we specify public sector oversight requirements in contracts, to avoid bureaucracy but ensure effective public protection arrangements? We believe that appropriate public sector oversight is important for ensuring proper and transparent management of offenders and risk of harm. The purpose of this public sector oversight should be to: n Protect the public. n Ensure greater transparency and accountability. n Give confidence to the public that public interest decisions are taken independently of provider interests. n Ensure minimum quality standards are achieved. How public sector oversight requirements should be specified To ensure a mutually beneficial relationship between the public sector and providers, all public sector oversight must be consistent, effective, proportionate and in accordance with the contract. The considerations below are critical to ensuring public transparency of services, but without the bureaucratic burdens that often comes with it. We recommend that: n The MoJ defines a clear set of quality standards for delivery to be included in delivery contracts. n The public sector probation service then has oversight of the provider s implementation of those standards, placing reasonable requirements on the provider to demonstrate these standards. n Any issues or disputes over quality should be resolved at the lowest level at first, before being escalated back to the MoJ where necessary. Defining quality standards for providers We believe that clear quality standards should be defined by the MoJ after consultation with the provider base. These quality standards are critical to ensuring effective public protection arrangements and strong accountability of services. They should be reflected in all delivery contracts. Quality standards could relate to the management of risk of harm, assessment tools, and specific requirements, such as Safeguarding or Mental Health issues, cases involving Partner Abuse or Sexual Offending. Provider implementation of standards Providers should be given the flexibility to decide how to implement standards defined by the MoJ. This flexibility ensures bureaucracy is minimised and providers can exercise professional judgement and discretion. They will then need to demonstrate those standards to the public probation service. Probation service oversight of standards The Public Probation Service should be responsible for ensuring providers are adhering to the quality standards set out by the MoJ. They should require the provider to demonstrate this adherence on an agreed minimum basis. The nature of this oversight could be defined at a national level by the MoJ, who should define the number, type, and frequency of cases to be assessed and the criteria for that assessment. 16

19 PART C: SYSTEM SPECIFICATION QUESTIONS CONTRACT SPECIFICATION These arrangements should be subject to review by HM Inspector of Probation to provide ministers with independent verification that the arrangements put in place meet required standards. Dealing with poor performance In principle, performance that does not meet these standards should be resolved at the lowest possible level at first. Ideally, a line manager will correct poor performance identified through their quality assurance systems. The issues and resolution should then be routinely shared with the local public sector manager for sign off. Where the manager is not satisfied that the issue has been resolved then an agreed process for escalation to senior managers and MoJ officials should be invoked with any contractual consequences. The above considerations are critical to ensuring public transparency of services, but without the bureaucratic burdens that often comes with it. Define and manage escalation of risk process The MoJ should also define processes for the shared supervision of high risk cases. A small number of MAPPA cases will be retained by the public sector, and the criteria for selecting these cases must be clear as a small number of these cases will be reassigned between providers during the period of the sentence. Once these processes have been defined at a national level, they can be regulated by the public probation service that can require providers to demonstrate them in the same way as other quality standards. 17

20 PART C: SYSTEM SPECIFICATION QUESTIONS CONTRACT SPECIFICATION QUESTION C5 We want to incentivise through the gate provision, but some prisoners will disperse to a different part of the country following release. How can we best account for that in contract design? We recognise that this is a particularly challenging area in the contract design. The solution is not immediately apparent and we look forward to reaching one through further discussion with the MoJ and other stakeholders. It is clear that a solution must include the right financial incentives for providers to work with offenders through the gate, and an appropriate expectation for providers to work together to maintain public protection and management of risk. Our own experience with cross-boundary working Currently in Wales, women prisoners are held across the border at HMP Eastwood Park, while North Wales prisoners can be held at HMP Altcourse, HMP Styal or other prisons across England. G4S s community based services are therefore used to dealing with the challenges of a dispersed population. This is a matter that is frequently addressed through a prison/probation forum known as the Wales Regional Offender Management Implementation and Development Group (OMDIG). OMDIG meets regularly to provide a strategic framework for ensuring that collaborative prison and community procedures are agreed at a senior management level across Welsh prisons and existing probation services. We would suggest that within a context of national changes to offender management, structures like OMDIG can ensure that embedded good practice is retained and that effective communication across custody and community is continued. This has brought significant public protection and quality based benefits. It is a model that can underpin, support and improve custody and community interface at all levels and across dispersed areas. Also worth noting is our experience on our Transitional Support Service (TSS), an existing mentoring service for short term prisoners returning to Wales managed by the G4S Offender Management and Intervention teams at HMP & YOI Parc. TSS is incentivised to engage with a range of prisons because payment is related to achieving a minimum number of positive offender engagements something that would be difficult to achieve with a limited and inward facing approach to the service because in the main prisons are the source of referrals. Incentivising providers The simplest way to ensure seamless provision to the offender through the gate would be for prisoners nearing the end of their custodial sentence to be held in prisons as close to their home community as possible. However, we realise that this is unrealistic in many cases, as such we have the following recommendations: n Provider Referral Tariff Incentivise joint working through shared PBR payments on offenders being released to other Contract Package Areas (CPAs). n Pay Providers on an Input basis for Prisoners outside of their home region a further option would be to pay providers on an input (service based) basis for services provided outside their contract area. A fixed service fee would ensure there is adequate resource to deliver this service and therefore providers are motivated to do so. 18

21 PART C: SYSTEM SPECIFICATION QUESTIONS CONTRACT SPECIFICATION QUESTION C6 What mechanisms can be used to incentivise excellent performance and robustly manage poor performance to ensure good value for money? Using relative performance measures We recommend that provider performance is measured using a relative measure rather than an absolute measure. This measure could include an in-built weighting system to account for social and economic differences between regions. Using this method, Provider A would be measured on their reduction of reoffending relative to the performance of Providers B, C and D. This is explored in further detail in our response to C2. This measure prevents the influence of external factors skewing provider performance. In turn this enables fairer and more accurate performance management. This also incentivises providers without any doubts that their operation will be financially affected by circumstances outside of their control. Incentivising excellent performance There should be a clear financial incentive to those providers that outperform others. Through using the relative measure, the funds assigned to PBR payments can be apportioned according to how a provider has performed against the average. Those performing far above average will be rewarded and incentivised with a larger portion of the PBR funds. Transparency of data is another way to incentivise excellent performance. By publishing a league table of provider performance in reducing reoffending within a CPA and between all CPAs, providers are held publicly accountable for their own results. Government may also want to consider rewarding the top 20% of providers in the league table with contract extensions or provision in new CPAs. Government may also wish to make it possible for high-performing providers to take over the delivery of poor-performing contracts in other CPAs. This also ensures that the offenders in poor-performing CPAs are not disadvantaged from that underperformance. Lead providers can adopt these same methods of incentivisation with their own delivery network. This ensures effective performance management is flowed down to all levels of provision. Managing poor performance Managing poor performance is especially important with offender services where public safety may be at risk. Robust management of poor performance should be stipulated in delivery contracts between the Government and the lead provider, and the lead provider and their delivery partners. When a provider is underperforming, they should be placed on a measureable action plan with clear stipulations on what needs to improve and by when. Wherever possible, contingency providers should be available to take on some of their referrals until they can demonstrate effective improvements in delivery. These contingency providers may be top performing organisations from another CPA with capacity to set up in a different region. Ultimately, providers who consistently underperform should have their contracts terminated. Lead providers should also have the ability to do this within their own delivery network, and this should be appropriately stated in their delivery contracts. 19

22 PART C: SYSTEM SPECIFICATION QUESTIONS SUPPLY CHAIN MANAGEMENT QUESTION C7 What steps should we take to ensure that lead providers manage and maintain a truly diverse supply chain in a fair, sustainable and transparent manner? QUESTION C8 What processes should be established to ensure that supply chain mismanagement is addressed? There are some clear and simple recommendations to support the relationship between lead providers and their supply chain of delivery partners. These recommendations are based on our own experience managing large supply chains of multi-sector organisations, most recently on our three Work Programme contracts. Implementing the Merlin Standard We recommend the early adoption of the Merlin Standard developed by DWP on the Work Programme. Learning from the first Merlin assessment provides a solid base for guidance to potential lead providers in developing, implementing, managing and reviewing their supply chains. Fair and transparent supply chain selection One of the lessons that can be learned from other large scale commissioning rounds is the amount of resource required by small organisations to engage with an extensive number of potential lead providers. This can create a lot of financial pressure with no guarantees that they will achieve any contracts as a result. One way of avoiding this would be to have a two phase commissioning process where lead providers/partnerships are short listed in the first phase. A small number (two or three) would be successful for each CPA who would then start the more detailed supply chain development in phase two. A further option would be for the authority to run a central Expression of Interest (EoI) round to create a framework of organisations that potential primes can approach as part of their supply chain development. A further key issue to bear in mind is the possibility of organisations working with more than one lead provider and the capacity of those organisations to deliver across multiple contracts this needs to be out in the open so service levels can be agreed in an informed way. At the same time, it is important that diversity is not a part of a delivery network for diversity s sake alone. What is important is that the right partners deliver relevant services, whatever their size or sector may be. When developing the supply chain for the Work Programme, G4S spoke to various consortia, to ensure that even very small charitable organisations were able to take part. 5 Drawing up clear and transparent delivery contracts The clearest and most robust way to regulate the relationship between lead providers and their delivery partners is by requiring legally enforceable contracts to be drawn up between the parties. The contracts should include clauses that ensure the delivery partner is managed in a fair, sustainable and transparent manner. The contracts should also clearly define mismanagement and the consequences of this. This will enable the MoJ, along with the courts, to hold the lead provider accountable for these commitments and address any mismanagement. The contracts will be enforceable by 20 5 Open Public Services White Paper Response by G4S Secure Solutions (UK&I) (September 2011)

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