Drawing on the commercial experience of the author, 'Rehabilitation Works: ensuring Payment by Results' cuts reoffending assesses the practicalities of implementing a PbR regime for reducing reoffending. How should the system be designed so as to avoid the risk of 'parking and creaming' of clients or offenders? And in what way can it be ensured that a diverse provider base is created, where SMEs and third sector organisations are not priced out of the bidding process? In order for a PbR model to be effective, there must be a diverse provider market and a commercial framework ensuring providers can generate a return whilst also offering the government value for money as a result of the policy. This paper recommends a phased introduction of outcome based payment mechanisms and stresses that the scheme will not be effective if offenders are treated as a single generic group.