Partnering with Local & Health Commissioners

From the outset, we work with commissioners and partners to understand their priorities and the real-world change they’re looking to create for individuals and communities. Together, we use these goals to define locally relevant outcomes upon which programme design, delivery and an overall contract are based.

During delivery, outcomes and the milestones towards them are tracked (according to mutually agreed frameworks) and independently verified. Example outcomes include:

• Unpaid carers sustaining a caring role for six months;
• Individuals with long-term health conditions reducing their primary care use over 12 months;
• Recently homeless (or at risk) individuals sustaining accommodation for six months.

Because we focus on achieving meaningful, long-term outcomes, this approach means commissioner payment is only made when measurable impact is achieved and evidenced.

A payment rate for each defined outcome is agreed with commissioners in advance. Some outcomes may be worth more than others due to considerations like higher overall impact or contribution to cost avoidance in the short, medium, or long term.

In order for VCSE delivery partners to deliver the agreed service, BOP pools together social investment to fund delivery activity and achievement of outcomes upfront. This working capital covers all programme costs and outgoings – shifting risk and upfront costs from delivery organisations and commissioners to social investors.

When outcomes are achieved and fully audited by a third party (typically commissioners themselves), the commissioner pays the value of these.

This works well for single, easily diagnosed problems, but it evidently fails where people are facing multi-faceted, complex problems.

An outcomes contract works the opposite way around: it defines the desired outcomes and their value first – this value is paid for by commissioners only once these outcomes have been achieved and verified.

Delivery teams – along with BOP’s expertise, guidance and the flexible funding it pools together – are free to design their own service specification and adjust resources, spending, and activities on an ongoing basis, as they learn what approaches work best in their unique context. (There may however be certain specific requirements built into the contract, for example to ensure Care Act compliance.)

What does this mean in practice? Teams can decide to buy in more resources or to recruit more staff if demand rises; if they discover that a particular resource or area of the project is not working well, they can divert the money towards areas where it has the most benefit.

Teams are also encouraged and focused on trying new approaches/creative solutions that haven’t been tried before without financial risk. And for commissioners, delaying payment until positive outcomes are achieved facilitates the double-running of acute and preventative services.

This approach is by nature highly flexible, local, and relationship-based (rather than transactional). We work in partnership with commissioners to understand their specific priorities and what outcomes they are looking to achieve. These could include:

• Preventing individuals entering longer term care
• Supporting individuals to maintain their carer role
• Supporting individuals to find and sustain a home
• Increasing employment among a certain cohort
• Improving service users’ health and wellbeing

We bring together local organisations – which would ordinarily compete for funding – around a shared goal: that of improving the lives of individuals using local services. We then support and develop these partnerships to make this goal a reality – building capacity locally at the same time.

By focusing on real-world, shared outcomes, this approach better addresses multi-faceted challenges and helps break through public service silos.

Traditional procurement usually involves the commissioning authority providing a set specification, for which delivery organisations are marked against set criteria.

Outcomes contracts are not tied to a prescribed specification (though certain elements will be mandatory). Instead, delivery organisations and consortia are able to allocate resources and adapt activity through a test and learn approach, according to what works for peoples’ unique circumstances. This means we carry out a detailed exploration process to help us to fully understand commissioner requirements and considerations.

Together, we agree on pricing for the outcomes in advance. We establish a contract cap, the maximum amount commissioners are happy to pay, which is paid incrementally according to how many outcomes are achieved during the programme (rather than as a fixed annual amount).

If outcomes achieved exceed targets, commissioners only pay up to the agreed contract cap. If the maximum number of outcomes are not achieved, the contract cap is not reached; you only pay for what has been achieved. This may mean more involvement from your finance teams and other stakeholders, due to the better value for money delivered.

Using this funding, we provide project finance to VCSE and other delivery organisations we have partnered with, so they can deliver specified social and/or environmental outcomes (pre-agreed with commissioners). The funding is repaid by commissioners only once outcomes have been achieved and evidenced; this shifts risk and upfront costs from delivery organisations and commissioners to our investors. BOP is a not-for-profit social enterprise and manages these funds on a not-for-profit basis.

UK Cabinet Office seeded the first pooled social investment fund which supported outcomes partnerships. This report analyses the approach in detail.

They focus on creating impact: evaluating performance using impact measurement frameworks, supporting initiatives that enable positive change in people’s lives or the planet.

UK Cabinet Office seeded the first pooled social investment fund which supported outcomes partnerships. This report analyses the approach in detail.

Our investors are primarily government institutions, and patient social investors such as benevolent funds, foundations, and pension funds.

Because payment is tied to achieving outcomes, we use all the tools, teams, and creative thinking we have to ensure that a service delivers outcomes successfully.

The flexible nature of this approach means we can keep iterating to find the best ways to do this. This could mean anything from purchasing additional services, developing staff training offerings, or stopping activities with low impact and finding new creative solutions instead.

Alongside learnings from data analysis, we hold ongoing conversations with frontline staff and service users to learn what is really working on the ground, to identify key needs, and to tailor the service accordingly.

The benefit paying for outcomes has over flexible block grants, is that it doesn’t just enable innovation but goes further and actively incentivises it.

IN PRACTICE: The Sunshine Project provides support to unpaid carers in a county. The number of unpaid carers needing to access services rises unexpectedly, demand on the service is higher than expected. 

How does The Sunshine Project respond? 

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Pay for inputs –> There are no additional funds to recruit more staff; workload and wait times become unsustainable; staff morale and overall care quality reduces; Care Act obligations are not met. 

Outcomes contract –> The unexpected rise is identified early via data analysis; necessary extra staff numbers are forecast; flexible funds are allocated to recruit new staff and cover demand, helping more carers.

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Pay for inputs –> Retrospective reporting identifies issues only during reporting period; accountability is poor; narrow reporting means emerging trends are not acted upon early. 

Outcomes contracts –> Progress dashboards are live for frontline staff, managers and strategic leads; monthly delivery and strategic boards maintain collective accountability of all partners; reporting holistically helps identify root causes and emerging trends.