The pitfalls and perils of payment by results

Abstract

The targets culture in UK public services that emerged during the past two decades fell foul of Goodhart’s Law, which led to increases in complexity and bureaucracy to counteract the gaming of the system by frontline staff. The emergence of payment-by-results claims to avoid this pitfall, but in practice it is likely to be exactly the same. In fact, there are aspects of payment-by-results which are likely to skew public sector objectives even more thoroughly than targets.