Department for International Development Payment by Results

1. Department for International Development Payment by Results

2. Contents • Context – international & domestic shifts. • What is Payment by Results (PbR)? • PbR in practice. • DFID’s Strategy for PbR.

3. UK Civil Service Reform – principles for better services with less Choice Decentralisation: “empowering all potential providers, from whichever sector, with the right to propose new ways to deliver services” Diversity of provision: “[encouraging] new, innovative providers to compete for contracts” Fair access: “[building] incentives for supporting particular social groups ...into contracts” Accountability: “getting good value for money for taxpayers, so that we no longer tolerate mediocrity and pay even when services are of poor quality”

4. Why and where PbR? We need more evidence • Trade off between benefits and costs of risks. We thinkPbR works best where: • Indicators can be defined and independently measured. • Sufficient institutional desire, capacity and control to deliver intervention (pol ec)

5. What is payment by results? Payment by results 100% funding on delivery Cash on Delivery Ethiopia Performance tranches Development impact bonds Global P’shipOutp Based Aid Health Results Innovation Common but differentiated approach Girls Education Challenge Milestone payments Partner govs Direction of travel Suppliers Traditional ‘input’ financing 100% funding upfront Investors Processes Inputs Outcomes Outputs

6. Paying by outcomes: DFID’s current activities Current and potential programmes by sector Clustering of programmes in service delivery Current and potential programmes by type Cascade effect with RBA programmes

7. PBR in practice – two pilot programmes

8. Emerging lessons: PbR in DFID • It ain’t easy! (skills, finance, time). • Complementary measures. • Performance management tool. • Simplicity & communication matters. • Context. Warning: this isn’t evidence!

9. DFID approach to PbR – building the evidence base • Expand the evidence base by doing more PbR: • Expanding the scope of PbR where appropriate, with a view to strategically addressing evidence gaps; • Rigorous, independent and comparable evaluations, in order to learn “what works”; • Leading by example, influence, link with and learn from others applying PbR both domestically and internationally. • Build capabilities for doing PbR in the right ways, by: • Translating evidence into action across the organisation; • Addressing systematic and incentive changes required to expand the scope of PbR; • Building skills and competencies relevant to PbR, in our partners and ourselves.

10. Thank you. Ellie Cockburn e-cockburn@dfid.gov.uk