A report carried out by the National Audit Office (NAO) found that the Department for Communities and Local Government’s (DCLG’s) failed to gain enough information on contract costs, such as analyzing what outcomes would be delivered, even if the DCLG’s scheme had not been in place.

The scheme involved the department paying local authorities for the number of troubled families that authorities brought to the help scheme.

The scheme seeks to help families into work and bring children back into school, in order to reduce the strain on social services.

The NAO report said that while the payment-by-results scheme had helped to increase focus on achieving outcomes: ““There is a lack of information on costs and the non-intervention rate (the level of outcomes that would have been achieved without the programmes). Without this information, there is an increased risk that the outcome payments will be set either too high or too low.”

The report added: “Whilst payment-by-results has benefits, both departments could have done more to understand its risks. Neither department is likely to achieve all the potential benefits of using payments-by-results. And performance varies significantly between the best and worst performing local authorities and the best and worst performing contractors.”

NAO warns public sector on out-dated ICT risks