At the flexible New Deal launch last week, I bumped into a rather well-known government adviser, and took the opportunity to ask him what he thought of creaming, parking and other perverse incentives. His response:
They're looking at it closely, and will continue to do so
The obvious way to tackle it would be to offer improved incentives for harder-to-help groups, similarly to the points system that rewards JCP advisers
A perverse incentive is an incentive that has an unintended and undesirable effect, that is against the interest of the incentive makers. While perverse incentives are equally possible in government-run delivery of services, this article focuses on their application to delivery by third-party providers.
