My Lords, as the noble Lord, Lord Beecham, bandied statistics around from authoritative organisations, I should add that the National Audit Office estimated that reoffending by ex-prisoners cost the economy between £9.5 billion and £13 billion in 2007-08, and I doubt that the figure has gone down since then.
It is all very well to talk about pilots and taking the time to conduct them. However, as I said, we are dealing with a section of reoffending which the previous Government thought they would deal with, tried to do so and then backed off. A lot of what we are dealing with here is a long-standing problem that is still costing the economy a great deal of money. Therefore, I think we are entitled to look at what works best in the present system and then bring forward positive ideas to tackle this very difficult problem.
As I approached my third year in my present office, I began to get slightly embarrassed about pilot schemes because all we seemed to do was go round and round in circles conducting pilots. Pilot schemes can be valuable but I suspect that we abandoned certain pilots because there was nothing significant to be gained from continuing with them, and we already had the feedback from the pilots started by the previous Government in Doncaster and Peterborough. I hear what the noble Lord, Lord Beecham, is saying about our following a high-risk policy. It is certainly a radical policy and delivering it will, no doubt, demand significant effort by my department. What we have learnt from the pilot schemes that have taken place, from the experience of payment by results in other parts of Whitehall and from the existing involvement of the voluntary sector in rehabilitation gives us confidence that if we apply ourselves, taking some of the warnings that he has rightly made, our solutions to the matters before us will work.
Our experience with initial payment-by-results pilots has increased our confidence about designing robust contracts that drive the required behaviour and help generate improved value for money. We have drawn lessons from pilots about establishing performance targets that will allow us to measure, with confidence, the impact of providers on reoffending rates; of designing payment mechanisms that reward providers only for achieving genuine success. We have looked at the benefits of co-design with the market; early provision of data, where possible; the importance of engaging with a wide range of voluntary sector providers in building diverse supply chains; the new complexities in managing PBR contracts and how we can best meet them within the department.
We have not been static on this: we are working on the kind of contracts. The consultation response set out our phased approach to implementation over the summer. We can complete the final details of our design and test robustly some of the details of our plan. The Secretary of State has committed to transparency in this process and we are publishing information on our website as soon as it is ready. We recently published information on our proposed payment mechanisms for the market to consider.
It is all right. I must not cause tensions between departments but when the noble Lord, Lord Beecham, quoted somebody from the Treasury saying that he did
not think the Ministry of Justice had a handle on the numbers, the terms “kettle” and “black” came to mind. I had better not go further down that road but before that Bench starts nodding too much about having a grasp of the numbers I would remind them of recent history. I am, nevertheless, pretty confident. I see the teams at work who are going to deal with this in a very businesslike way.
I do not resile from what I am saying. We are doing something extremely exciting, challenging and radical which is opening up the real opportunity—which escaped the Opposition during 13 years in Government—of dealing with this particularly difficult, complex area of reoffending. I will therefore resist Amendment 21 which would require the details of any system of payment by results to be laid before and approved by resolution of both Houses before being implemented. It would also require the piloting of payment by results for a three-year period, subject to independent evaluation and based on existing probation trust areas.
As noble Lords will, no doubt, be aware, we are currently piloting a number of different approaches to payment by results across government and have gained valuable learning data. The lessons we have drawn from implementing our pilots and from the experience of other departments give us confidence that we can design and commission robust contracts that drive the right behaviours and generate value for money. It is, of course, extremely easy to get quotes from various organisations about this but we are moving this forward. The Government have consulted carefully on the principle behind our intended payment mechanisms. In the recent response to our consultation, we explained how we had taken on board comments that the payment mechanism must incentivise providers to work with all offenders, not cherry pick them, including the most prolific, and how we had developed the payment mechanisms accordingly. We have now published a draft payment mechanism for discussion and will continue to engage closely with potential providers to make sure that we get this right.
As I have explained, given the current financial constraints and the importance of delivering effective rehabilitation services to all those who need them, maintaining the current trust structure and piloting payment by results within the existing area are not options open to us. In the light of these arguments, I ask the noble Lord to withdraw his amendment.
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