Price and Payment Mechanism - Section 7
27 Section 7 of SoPC contain principles and approaches for dealing with structuring the payment mechanism. This is a new section providing new or substantially updated guidance on the development and calibration of payment mechanisms and on the use of User Satisfaction Surveys.
28 Section 7.2 sets out the key features of a payment mechanism and emphasises that it is not generally appropriate to "sculpt" the Unitary Charge other than for relevant general price changes or to ensure consistency with any ramp-up in services in an initial phase or project phasing.
29 Section 7.3 sets out principles to be applied in structuring the payment mechanism and Section 7.5 discusses calibration. Note that Section 7.4 (Usage Base Systems) is not relevant to PFI social care projects.
30 The Local Authority should not seek compensation in addition to making deductions from the Service Payment. Section 7.8 of SoPC sets out suitable drafting to avoid double claiming by the Local Authority. This has been incorporated into the Model Contract.
31 Section 7.9 of SoPC deals, in particular, with user satisfaction. This will be of relevance and the Local Authorities should carefully consider how they can incentivise the Service Provider to deliver the Services to a high standard.
32 Local Authorities are already under a statutory duty to secure continuous improvement i.e. the best value duty and the Model Contract includes best value provisions. Under the best value duty, there is an obligation to carryout user satisfaction surveys. SoPC suggests that Local Authorities impose sanctions for poor user satisfaction, as illustrated by a poor response to a survey.
33 Various approaches are set out in Section 7.9.6:
• making direct financial deductions;
• awarding performance points;
• imposition of a remedial plan;
• carrying out of a performance audit;
• linking deductions to complaint/calls to the helpdesk.
However this has not been incorporated into the Model Contract or the Payment Mechanism.