Illustrative · Kestrel Pathways is a constructed operator, not a real provider. Its shape, scale and contract mix are drawn from how the UK employability sector actually works, and every figure is indicative unless it carries a source.
Operations
Payment by results, and what it produces
The funding model stated fairly, then the four behaviours it reliably generates, how each one works, where it enters the operation and what actually stops it.
Payment by results pays a service fee for holding a caseload, then larger sums when a person starts work and stays in it. It transfers risk from the commissioner to the provider, rewards the thing everybody says they want, and is auditable. Those are three genuine virtues and any critique that skips them is not serious.
It also reliably produces four behaviours. None of them requires a bad actor. Each is what a rational operation does when revenue depends on a claimable event and the cost of pursuing one case is far higher than another.
Chapter 1 · Mechanisms
The four behaviours
Each row names the behaviour, how it works, where in the operation it actually enters, and what stops it. Note how many of the controls in the last column are not available to the provider alone, which is the honest and inconvenient finding of this page.
| What it is | How it happens | Where it enters | What stops it |
|---|---|---|---|
| Creaming | Effort concentrates on participants closest to work, because the same hour produces more claimable outcomes there. | Allocation, at the team leader desk, and again in who gets put forward to employers. | Differential pricing by assessed distance from work, so the hard case is worth attempting. Internal effort-per-participant reporting is the cheapest partial check. |
| Parking | Participants judged unlikely to convert are kept compliant with minimum contact rather than worked with. They are not refused; they are maintained. | The caseload review, where somebody decides where this month attention goes. It is rarely written down as a decision at all. | Minimum service standards that are audited on delivery rather than on record keeping, plus publishing outcomes by cohort so a parked group becomes visible. |
| Window management | Activity intensifies before a payment point and stops after the last one, because the twenty seventh week is worth nothing. | In-work support, which is scheduled against payment dates rather than against risk of the job failing. | Measuring, though not necessarily paying, at twelve months. What is measured continues to be managed. |
| Definition drift | The boundary of what counts as a start, an engagement or an outcome moves slowly towards whatever is claimable, one reasonable interpretation at a time. | The performance and MI function, in guidance notes rather than in policy documents. | Version controlled definitions with a change log the commissioner can see, and periodic independent sampling of claims against the original wording. |
summary: four behaviours produced by outcome funding. They are distinct mechanisms, they enter the operation at different points, and a control that works on one of them may do nothing at all to another.
Chapter 2 · Inside the walls
What the provider can do on its own
Three things, none of them free. Report effort per participant against assessed distance from work, internally and then publicly, which makes creaming visible rather than deniable. Set a minimum service standard for every participant regardless of conversion likelihood, and audit it on delivery rather than on paperwork. And version control the definitions, so drift becomes an event with a date rather than a slow accumulation of reasonable readings.
All three lower reported performance in the short run. That is not an argument against them. It is the price of the second value on the brand page, and a company that will not pay it should remove the value rather than keep both.
Chapter 3 · Outside the walls
What needs the commissioner
Differential pricing by distance from work. Measurement at twelve and twenty four months, with the employment data shared back. And a comparison group, somewhere in the programme, so that additionality can be estimated rather than assumed.
A provider arguing for all three is arguing against its own short term revenue, which is precisely why the argument is worth more coming from a provider than from anyone else.