The Government has no idea whether its payment-by-results schemes are providing value for money, according to its own spending watchdog.
The National Audit Office (NAO) says up to £15bn of public spending on the schemes which include welfare to work, family support, offender rehabilitation and international aid are not being monitored and the Government cannot demonstrate their value.
It warns that 'without a common source of shared expertise and a strong evidence base, payment by results schemes may be poorly designed and implemented, and commissioners are in danger of “reinventing the wheel” for each new scheme.'
The Government has a growing portfolio of the schemes where payment depends, at least in part, on the provider achieving outcomes specified by the commissioner.
The NAO says commissioners must establish performance expectations at the start of a scheme and actively monitor and manage provider performance. A part of the Government should become the repository of information and expertise about public sector use of the schemes.
Amyas Morse, head of the NAO, said: 'Payment by results potentially offers benefits such as innovative solutions to intractable problems. If it can deliver these benefits, then the increased risk and cost may be justified, but this requires credible evidence.
'Without such evidence, commissioners may be using this mechanism in circumstances to which it is ill-suited, to the detriment of value for money.'
