Pre-payment cards in personalised public services

In a personalised public service the individual has choice and control over the services they receive. If the public agency in this policy area enables individuals to take the cash equivalent of a service instead of having it paid for by the commissioner – such as local authorities in the case of Personal Budgets in adult social care, or PCTs (as is) as Personal Budgets are being trialed in the health service – then one of the questions becomes how the individual can make payments to buy services they want.

In our day-to-day lives we hardly question this. Most of us have a bank account which holds our money and we use a debit card over which we have control to make payment from our bank account to a service provider whose service we want to buy, e.g. Waterstone’s, Kwik Fit, Tesco.

Some services offer a form of loyalty card, in which you can pre-pay money onto a card and use that card instead of cash at that service. A good example of this is Starbucks (as my bank account will attest).

Over the last two or three years, public agencies have looked at pre-payment cards as a means by which to support and implement personalised public services. Some recent research by DWP (pdf) into “smartcard” schemes (which actually go slightly wider than just pre-payments cards, since they don’t necessarily entail money) has some interesting findings around the use of such cards, which I thought it would be useful to share.

The first area of interest is whether smart cards are available generally for all members of the public or for a specific subset of the local population. The key issue here is one of cost and scale. General schemes cover areas such as travel, leisure and library services, whereas more specific schemes can be found, for example, for only adult social care users.

The second area of interest is the benefits to service users, captured as follows:

  • A smartcard allows a user to complete an application form for services “only once”. Having done so for the card, they can then access all of the services that card is designed to cover
  • Smartcard schemes can offer individuals greater access to local and potentially national services
  • Smartcards can potentially offer financial benefits in the form of service discounts for users.

There are, of course, benefits to public agencies too:

  • Though smartcard schemes have a high set-up value, the ability to add on further services under the scheme is much lower than a standalone scheme at a later date
  • Administrative costs for public agencies associated with making payments to service users and providers should decrease because of automation of the paying process and record collecting
  • A central smartcard system can help with better data collection
  • Smartcards can in theory (and sometimes in practice) drive joined-up working across public agencies or departments within one single organisation.

A very good example of pre-payments cards is Cheshire East Council’s Empower Card (pdf). According to the Council, this has resulted in efficiency savings of 49% concerning the users engaged in the scheme – a saving of some £236,000 on the previous account management process.

There are undoubtedly some issues regarding smartcards, not least of which is whether the costs of investing up front in a scheme provides realisable savings later on (I suspect it can, though I suspect the potential for significant costs is also a reasonable risk).

Even so, smartcards are a useful innovation that can enable service users to have more choice and control over the services they receive whilst saving money for public agencies.

Some more research on smartcards will be published next year by the National Centre for Social Research, which I’ll hopefully blog about then.

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rich_w

Man of letters & numbers; also occasionally of action. Husband to NTW. Dad of three. Friendly geek.

One thought on “Pre-payment cards in personalised public services”

  1. Really interesting article and links to a conversation we had at http://simpl.co/interactivism event where PayPal was a very trusted tool.

    One word of caution would be the need for us to look to the USA where pre-paid cards (of a different sort admittedly) are acting as a poverty trap with costs associated and it’s taking the work of @CFPB and others to unpick the damage being done. Not necessarily something here and now, but one risk to keep an eye on.

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