Oldham Payment by Results in Children’s Centres

Themes this local practice example relates to:

  • Early Years
  • General resources

Basic details

Organisation submitting example

Oldham Council

Local authority/local area:

Oldham Council

The context and rationale

Oldham is one of the first wave local authorities trialling Payment by Results (PbR) in children’s centres on behalf of the Department for Education (DfE) during 2011-13. The introduction of PbR in 16 children’s centres has seen the following key changes:
a. Contractual arrangements in place with regards to PbR.
b. More innovative and effective use of performance information to evidence impact.
c. Innovations in the use of technology to enable the above.

Oldham Demographics

Oldham metropolitan borough council is a place of great contrast. The western part is densely developed with a rich cultural mix and is partly a legacy of the historical period of urbanisation when Oldham grew to become an industrial centre. The east of the borough has a village landscape; a quarter of the borough lies in the Peak District national park. The variety and mix of social, economic and cultural demographics presents both opportunities and challenges. National policy drivers are reflected in the adoption of local priorities for action.

Oldham Population

Oldham has a population of 219,800 according to the 2010 Mid-Year Population Estimates. Currently, there are just over 16,200 under 5s resident in the borough. The 2008-based Sub-National Population Projections for Oldham indicate that the population will grow by an estimated 5% from around 218,200 in 2008 to around 229,100 in 2022. The composition of this population is forecast to change significantly over this time. 

Oldham currently has a younger age structure than both the North West and England, with fewer people (15.1%) aged over working age (65+) than are aged 0-15 (22.2%). Three-fifths (62.8%) of Oldham’s population are currently of working age (16-64), lower than the proportion for the North West (64.6%) or England (64.8%). 

Oldham will continue to have a relatively youthful age structure, with more people aged 0-15 than above working age. The proportion of people aged 0 to 15 will increase from 22.2% in 2009 to 23.1% in 2022. Unlike Oldham, the North West and England will both have larger populations aged above working age than aged 0-15. 

The proportion of Oldham’s male and female population aged 65 or over will increase from around 14.9% in 2009 to around 17.5% by 2022.
The projections therefore mean that there will be an increasing proportion of both younger and older people dependent on a smaller proportion of working age people.


According to the 2009 Experimental Mid-Year Estimates by Ethnic Group, Oldham has a higher proportion of non-white Black and Minority Ethnic (BME) residents (17.2%) than the North West (8.3%) or England (12.5%). The age structure of Oldham’s population varies with ethnic group.

The proportion of Oldham’s population from BME groups is forecast to increase from about 18.3% in 2010 to around one-fifth (19.4%) in 2012, and to one quarter (24.6%) in 2022. This is predominantly associated with the growth of Oldham’s Pakistani and Bangladeshi heritage communities and is due primarily to the relatively youthful age structures of these populations. 

Around three out of ten (29.9%) children aged under 15 are from BME groups. This is forecast to increase to around four out of ten (37.2%) by 2022.

Income Deprivation Affecting Children Indices (IDACI)

The Income Deprivation Affecting Children Index (IDACI) represents the proportion of children aged 0-15 living in income deprived families. It is a subset of the Income Deprivation domain. 
On the Income Deprivation Affecting Children Index (IDACI), there are still 4 Super Output Areas (SOAs) within the 1% most deprived nationally. The number of SOAs within the 5% most deprived has fallen from 17 to 14 between Indices of Deprivation 2007 and Indices of Deprivation 2010. The number within the 10% most deprived band has increased from 23 to 25, but that within the 20% most deprived band has fallen from 48 to 45.
On IDACI 2007, there were 22 SOAs in Oldham where at least 50% of children were living in income-deprived families. By IDACI 2010, this had decreased to 22. On IDACI 2007, there were 41 SOAs where more than 40% of children were living in income-deprived families. By 2010, this had decreased to 33. However, there has been an increase from 73 to 79 in the number of SOAs where from 20% to under 40% of children are living in income-deprived families. 

Children’s Centre Delivery
Two national charity organisations are commissioned to deliver Oldham's 16 children's centres through a district delivery model. Each district is made up of a number of centres operating as a cluster, with each fulfilling the statutory definition of a children's centre in its own right. The current climate of economic challenge and the need to evidence value for public money was a key driver in deciding to implement PbR locally and prior to the DfE introducing this model under a national trial.

Knowledge base

There are many payment by results schemes in the public sector. Historically, the schemes have centred on services whereby a payment for an output or proxy outcome has been established. One example is the prison service, where a payment is made upon a person not returning into custody.
The PbR scheme in children’s centres poses challenges. The intended outcomes for the child and family are often achieved as part of a multi-agency team approach and it is therefore difficult to attribute single agency responsibilities and thus make a payment to any one individual agency.
Unlike in other PbR schemes where the outputs are often clear and measurable, the impact of the children’s centre on the life chances of a child are much more ambiguous, given that there are so many variables. This meant that greater emphasis on each agency’s contribution and the impact of its engagement needed to be agreed, with measurable and attributable performance targets.
The overarching objective in setting a payment by results model in children’s centres was to target resources and improve outcomes and learning readiness with a particular emphasis on those children who are deemed to be in ‘greatest need’.

Description and aims 

In 2011-12, Oldham introduced Payment by Results (PbR) into children’s centre contracts. Each centre co-produced a specific set of targets against the core purpose of children’s centres, with the very specific aim of incentivising delivery to those children in greatest need. The amount of the financial incentive was small - the overarching principle was to introduce a ‘culture’ of performance-related incentives under a clear commissioning framework and strategy. Oldham’s definition of “greatest need” can be seen below:

In 2012-13, Oldham became one of nine first wave local authorities trialling PbR in children’s centres on behalf of the DfE’s national trial. The trial is ongoing at the time of documenting this example, but will be referred to where possible.

As part of Oldham’s Targeted Intervention and Prevention strategy, Oldham has a very clear, adopted strategy for a 0-4 offer for all children, coordinated and funnelled through its network of clustered children’s centres operating at a locality level. The single underpinning outcome of the 0-4 offer is supporting families to ensure our children are ready to learn by the time they reach formal school age.

Key contributory outcomes to this are:

• physically and mentally healthy families
• aspirant parents who are confident in their parenting capability.

This forms the fundamental basis of the core purpose for Oldham’s children’s centres.

Children’s centre contracts include the following performance related criteria:

• To change the culture of providers to operate in a more performance related environment
• To achieve maximum value for public money 
• To incentivise providers to direct their resource at those in most need to achieve the greatest impact on improved outcomes for young children.

The practice

The work to establish the model was multi-faceted and included a range of providers, users and other key partners in co-producing the model.
The practice definition relates to the process undertaken in 2011-12 to introduce PbR locally as part of children’s centre contractual arrangements. References to the ‘Family Action Panel’ are an example of operational change brought about as a result of using PbR to incentivise delivery. The inclusion of this as an example is to illustrate how the introduction of PbR into a contractual arrangement has affected change in operational delivery.

The concept behind the introduction of PbR was very clear, to incentivise local delivery against the core purpose and improve outcomes for families with young children. The initial introduction of PbR was intended to change mindsets and culture within children’s centre services and to trial the notion of results-based funding. Whilst it was appreciated that operational practice would likely change as a result of the introduction of PbR, the aim was not to ‘prescribe’ operational practice, but simply to reward evidenced impact.

The following outlines the steps taken to develop and implement PbR in Oldham’s children’s centres: 

1. The initial concept and idea of introducing PbR was agreed and ratified as a viable option for incentivising delivery in children’s centres through existing governance arrangements and as part of the children’s centre commissioning arrangements. PbR was included as part of a series of options presented.
2. A full review of children’s centres key performance indicators was undertaken to establish a set of achievable yet challenging targets against which a children’s centre could be paid. The key here was to establish a set of measures that were directly attributable to the core children’s centre service being delivered through the contract. Agreed performance measures for Oldham’s children’s centres in 2011/12 were:
a. Register, engage and evidence a positive impact on those families in greatest need
b. Register and engage those families residing in a 30% Lower layer Super Output Area (LSOA) (IMD 2010).
It is important to note here that the above two targets were applicable to all children’s centres. Each individual children’s centre continued to set targets relating to specific population needs in its footprint.
3. At this point, whilst it was important to set and agree the above measures for the entire children’s centre programme, it was also critical to set and agree the exact same measure within Oldham’s Children and Young People’s Plan (CYPP). Without this golden thread linked right through to the strategic children’s services plan, the targets for children’s centres would be in isolation to the priorities of the organisation.
4. The proposed measures and target thresholds were then agreed with contract deliverers, ensuring that the model was co-produced rather than enforced. Ongoing communication with providers was essential at this point to ensure continuous engagement with service deliverers as the process and model developed. It was imperative not to create a target-setting and PbR framework in a ‘bubble’ without capturing the vital contributions of key stakeholders.
5. Agreed ICT processes for capturing evidence of outputs from source. It cannot be expressed enough how important it was to bring together disparate information sources and systems in order to continually monitor progress against each of the PbR measures:
a. The information required to evidence progress against the above measures was stored in a number of management information systems across the local authority. These systems included the social care database, the education database, the children’s centre database and the CAF database.
b. On a quarterly basis, extracts were taken from each of these systems and matched together to produce a ‘golden record’ for each child ’in greatest need’. Initially, this process was carried out by an Analyst and more recently, Oldham’s ICT provider has developed a bespoke piece of middleware software that automatically takes information feeds from the systems described above, matches the data together and creates the ‘golden record’ described.
c. The above process highlighted a number of information sharing issues. It became apparent that there was a requirement to share social care information with children’s centres. Initially, this was a major issue and posed a critical risk to the success of the PbR project. Social care were able to amend their consent capture processes at source and seek consent to share information with children’s centres at the initial point of contact with a family. This enabled the flow of information to children’s centres and was critical to the success of the PbR measure.
d. By linking these datasets together, Oldham was able to provide information to inspectors at its recent Safeguarding and Looked After Children inspection where outcomes were ‘good’. 
6. Agreed performance monitoring processes for capturing evidence of impact on life chances of those in greatest need. One of the first issues raised during the co-production of the measures was that whilst all stakeholders agreed that focusing on those children in greatest need was a priority, the agreed measures were outputs and not an indication of impact. It was therefore agreed that for each child ‘in greatest need’ there would be an evidence of impact summary. This ongoing summary captured a) the baseline developmental stage of the child upon accessing children’s centre services and b) the ongoing impact being achieved by the children’s centre. 
7. Performance monitor each childrens centre’s progress against agreed targets at quarterly intervals under a mandated performance cycle:
a. Oldham has a robust quarterly monitoring framework to enable children’s centres to evidence their impact on key outcomes. PbR measures were simply added into this framework and monitored on a quarterly basis.
b. This information collected on a quarterly basis was then aggregated to children’s centre footprint and LA level and subsequently formed the baseline and progress information reported back to children’s centre lead agents and the LA children’s centre governance groups. This enabled not only children’s centres to monitor their progress against targets but also allowed the LA to monitor its overall progress to the measure agreed in the CYPP. Exceptions in performance were reported up through to Oldham’s Children’s Trust Board.
c. This golden thread of performance is absolutely imperative for the success of PbR in children’s centres.
8. Release payment at the end of Q3 2011-12 to those children’s centres achieving the expected standard. For those centres which had achieved their agreed level of performance, a small PbR financial reward was made. In 2011-12, all children’s centres in Oldham achieved their agreed and expected level of performance and accessed their PbR premium payment.

PbR Trial 2012/13
By introducing PbR in 2011-12, Oldham has learned a number of lessons that have informed the development of the DfE trial of PbR in 2012-13, for example:
a. The requirement for automated linking of systems to allow live information to be shared with children’s centres. 
b. Attribution: Oldham has developed, with its children’s centres lead agents, a basket of performance measures to be trialled in 2012-13 and beyond, that capture the contribution of the children’s centre core team across the core purpose. For example, it became apparent that it was not possible to set a measure for children’s centres to ‘increase breastfeeding rates at 6-8 weeks’ because there are so many factors that influence the decision to breastfeed. To overcome some of these attribution issues, alternative measures are now being adopted. In this specific example, Oldham are exploring the percentage of mothers who have sustained contact with children’s centres and subsequently breastfeed at 6-8 weeks, compared to those mothers who do not have sustained contact with children’s centres. This approach is being replicated across the core purpose.
The learning from the local introduction of PbR has allowed Oldham to progress the existing model and expand its set of measures for capturing the children’s centre contribution to broader outcomes. Oldham is currently gathering baseline performance data for a new basket of measures that include:

• Families in greatest need who have sustained contact with children’s centre services
• Mothers who breastfeed at 6-8 weeks and have sustained contact with children’s centres
• Children who achieve a good level of development at the Early Years Foundation Stage Profile and have sustained contact with children’s centres
• Children who access the 2-,3- and 4-year-old offer of early education, have sustained contact with children’s centres and progress to achieve a good level of development at EYFSP.
• Parents who are identified by the children’s centre as requiring evidence-based parenting who subsequently start and complete an evidence based parenting course.
This is a small example of some of the measures Oldham is interrogating with core partners as part of the national trial of PbR in Oldham.
The diagram below represents how PbR in children’s centres forms part of the ongoing performance monitoring cycle within children’s services in Oldham:

Those involved

The following stakeholders were/are involved in the process:
1. Families and parent representatives
2. Elected members and the lead member for children’s services
3. Director of Children’s Services
4. Locality/district managers and partners
5. Children’s centre lead agents and core teams delivering services under contracted commissioned arrangements
6. Children’s Centre Advisory Boards – providing challenge to children’s centres on their performance against PbR measures. This included parent/user representation
7. Children’s centre governance infrastructure, with representation at a strategic level from across the core purpose partners
8. Corporate performance services – providing performance information to both the children’s centres and to the LA on a quarterly basis relating to progress against PbR measures 
9. Corporate business change - project management support
10. Local IT provider – development of bespoke IT development systems
11. External research/validation.

Achievements so far

Performance measures
The introduction of PbR in Oldham’s children’s centres was specifically intended to increase engagement with those children in greatest need in order to improve their life chances and specifically to increase their readiness to learn. This measure is defined as follows:
Percentage of children in greatest need* who are registered and engaged with their local children’s centre.
*Greatest need is defined in Oldham (please note this definition will vary across the country) as a young child who, during the financial year 2011-12 has been assessed as being in any one of the following categories of need:
• Looked after child
• Child protection
• Child in need
• CAF (Family CAF 2012 onwards)
• Additional and complex needs
• Residing in a ‘Troubled Family’ (2012 onwards)
Alongside this statistical measure, each children’s centre was required to submit an impact summary for each child engaged that tracked the progress of the child’s development over the period.


Quantitative: baseline data as at the end of the 2010/11 financial year showed that only 40% of children in greatest need were registered and engaged with their local children’s centre in Oldham. After the introduction of PbR in children’s centres, and at the end of the 2011-12 financial year, this had risen to 80% of those children in greatest need being registered and engaged with their local children’s centre.

Qualitative: At this stage, it is too early to show long term evidence of impact. Longer term evidence will be gathered throughout the now formal trial of PbR on behalf of the DfE. Below are a few initial examples of the positive impact of children’s centre engagement with those in greatest need:
‘Mum successfully continued breast feeding her baby as a direct result of support from the Baby Bistro group. She is confident to access children’s centre groups.’
‘Mum is able to spend quality time with her baby on a 1:1 basis by carrying out baby massage and simple activities which has helped with bonding.’

‘Family utilised the two year grant through the children’s centre and have transitioned onto the NEG at the same nursery and this has improved play & stimulation, social skills, language development and behaviour and boundaries for child. Mum attends some children’s centre activities at her chosen centre, and has benefitted from behaviour management support and play & stimulation in the home from the Outreach Team.’

‘Due to Outreach Team support and children’s centre support, mum accessed universal and targeted sessions at the centre, joined a local gym, embedded appropriate bedtime routines enabling child to sleep through the night. Mum has also since gained part time employment after accessing courses at the centre.’

‘Dad reduced social isolation by attending sessions. XX socialising with peers and learning to share. Staff observed XX exhibiting signs of AEN. Referral to Early Years AEN team and Woodfield Centre. IEP meetings commence and XX diagnosed with Autism. CC made referral to Community Outreach to support mum and dad with behaviour management. Parents now able to better understand XX’s behaviour and support being coordinated efficiently. XX now attending nursery.’

The difference made: the difference made to date appears impressive in terms of beginning to change the culture and attitudes towards PbR as a model for targeting intervention and resources where it is needed the most. This has allowed Oldham to form a firm baseline for progressing into a more sophisticated model of PbR during 2012-15, under a new and refreshed district delivery model for children’s centres and a refreshed core purpose within a new commission. 

Examples of change in approach and culture
Health services and the core purpose – Being part of a national level trial has focused core partners on their role in agreeing performance targets within an integrated delivery model. Health services in Oldham led the co production of health measures for children’s centres to ensure that appropriate targets were set for children’s centres. 

A clear focus on performance – It has become very clear that stakeholders are now seeing the clear link between overarching key performance indicators and operational delivery. Historically, performance indicators have perhaps been treated in silo as a reporting mechanism whereas PbR has focused stakeholders on a more performance-related delivery model. 

Not ‘data’ – Historically, data has been a word that has been used to describe anything and everything relating to performance information, ICT and information governance. PbR has changed this culture to a “business intelligence” culture. As a result, Oldham’s children’s centres have a business intelligence group whose responsibility it is to use the data within systems and turn it into viable business intelligence to inform planning and delivery. It is now very clear that performance measures are not an aside to simply comply with and report on, but a tool to use to inform planning at a local level and commissioning at a strategic level.

Changes in operational delivery and intervention

Example used: ‘Family Action Panel’ – This is an example of operational change in practice that was influenced by the introduction of Payment by Results in children’s centres in Oldham. This operational change in delivery provided an identification and tracking mechanism in the district in which it was implemented.

In addition to the qualitative and quantitative evidence presented above, the introduction of PbR in Oldham has seen operational delivery changes in terms of how agencies work more closely together to identify those children in greatest need and deliver appropriate interventions. An example of this is the district aligned ‘Family Action Panel’ now being delivered in the Chadderton district of Oldham spanning three children’s centres: Holly Grove, Stockbrook and Stanley Road. The diagram below shows how a multi-agency, multi-reach area panel convenes to plan interventions and evidence impact with those children in greatest need:

What this approach means for those children’s centres working in the Chadderton district is:

• PbR has not just focused the centres on targets but has enabled processes to be developed which focus on needs-led targets.
• It has reduced duplication of services. 
• They are focused on vulnerable families and targeted groups.
• The panel was designed as a central consistent point of contact, referral pathway and mechanism of recording information and impact evidence.
• Enhanced relationships with partners and information sharing about families in greatest need who perhaps wouldn’t have accessed services. 
• Engagement of families increased through closer working with other agencies (Health, social care, community outreach) 
• Quality of home visits has increased
• Skills of the team have been enhanced
• Analysis of themes being identified at the panel is possible, for example, behaviour management. 
• The district approach has enabled effective and efficient deployment of staff and has encouraged skill mixing. 
• This approach has led to a consistent standard of service delivery across the entire district 
• Identified hotspot areas and mapping of provision across the district
• Allowed the creation of a system for tracking families and enabled services to follow up those that do not initially engage.


Sustaining our practice: As previously mentioned, Oldham is one of the first wave local authorities trialling PbR in children’s centres on behalf of the DfE during 2011-13. Oldham’s local introduction in 2011-12 has allowed important lessons to be learned at an early stage and key risks to be mitigated before trialling PbR on behalf of the DfE. Oldham will now be trialling a much more sophisticated model that evidences the children’s centres contribution to the key broader outcome measures and subsequently, rewards a positive impact on some of the social inequalities experienced by those young children and families in greatest need.
A 3-year commitment to the children’s centre delivery model and a strong strategic vision and offer for families with children 0-4 has been key in ensuring sustainability. This commitment has allowed for a very clear performance framework to be embedded in practice and has also allowed key performance targets to be measured over the short- and medium-term to allow us to evidence the impact that the children’s centre programme is having on families with young children.

Learning from the experience: in order for PbR to be a success in children’s centres in Oldham, the agreed targets had to be attributable to the children’s centres themselves, i.e. be within their gift to achieve. Similarly and critically, targets must be clearly defined and performance data clearly specified and agreed at the outset.

Challenges: the biggest challenge faced in Oldham like in many other local authorities across the country, was that of information sharing. In order for children’s centres to engage with those children in greatest need, there was an immediate requirement for information sharing of person-identifiable information. To remove this barrier, mechanisms to capture consent to share were introduced into existing processes with key partner agencies to allow sharing of information with children’s centres. 
Achieving each milestone outlined above raised its own set of challenges that were only overcome through strong leadership and buy-in from core partners.

Replication: the framework used locally was specifically designed so that it could be utilised with any commissioned service. As long as the attribution is clear, information is shared appropriately and the performance governance arrangements are in place, the PbR framework can be incorporated into a wide range of commissioning arrangements.

A key learning point has been not to attempt to jump from the start to the end in one leap. There are milestones and precursors that need to be in place along the way in order for PbR to be a success:

1. A clear strategy
2. A strong and well understood commissioning and delivery model
3. A clear performance management framework including clear governance channels.
4. Agreed and attributable performance targets including clear baseline information
5. A strong ICT infrastructure to support the processing and collection of information
6. Robust information governance processes and a clear understanding of the Data Protection Act requirements to enable information processing.
7. Clear links to the Children and Young People’s Plan.

Core Leadership Behaviours
Eight core behaviours have been identified as successful elements of leadership (National College for Leadership of Schools and Children’s Services/C4EO (2011). Resourceful leadership: how directors of children’s services improve outcomes for children. Full report. Nottingham: NCSL see http://www.c4eo.org.uk/themes/files/resourceful_leadership_dcs.pdf). 

The two leadership behaviours that have been important in this example are:
• The ability to collaborate – this is the fundamental principle underpinning the core purpose of children’s centres. Without the ability to collaborate, not only with core partners but also with key information and intelligence partners, the ability to coherently evidence impact would be severely impeded, therefore making PbR impossible.
• Focusing on results – this is the primary function of any Payment by Results initiative. The successful capture and subsequent presentation of evidence of improved performance against key indicators ultimately dictates whether or not funds are released in the PbR scheme.

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