"This report reviews international experience of the use of differential payments in job outcome performance-based contracting for employment programmes.

The first section reviews the development of performance-based contracting and the issues involved in differential access to employment services and programmes. Subsequently, the report reviews detailed evidence from countries that have made most extensive use of performance-based contracting, with case studies of Australia, the Netherlands, the USA and Great Britain. It assesses how the hardest to help were identified and variations in the use of differential payments and considered available evidence on impacts and how such systems sought to reduce 'creaming' and 'parking'.

The report considers the policy implications of the case study findings and of other payment models that have been proposed, such as a 'target accelerator'. Whilst there is no simple model that DWP could import, the report suggests ways in which the pricing and contracting system may be used to encourage providers to work with higher risk, higher cost participants."

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