Government adopts new approach to its employment programmes
There is a recognition that the DWP should work closely with representative bodies in developing the future of programmes, Paul Warner says
The effectiveness of government programmes to help unemployed people back into work has come under regular scrutiny since the start of the economic downturn in 2008. With the economy now picking up, the overall performance of the Department for Work and Pensions’ current flagship scheme, the Work Programme, has improved which I would argue is due to both the upturn and the design and delivery of the programme itself.
New ways of commissioning
The DWP published a Commissioning Strategy for welfare-to-work services at the end of July.
The strategy declares an intention to broaden thinking and look to develop new ways of commissioning by using a range of different approaches. It recognises the need for extended partnership working at all levels in order to drive best value, acknowledging that this be in terms of quality rather than just price. AELP has always been of the view that commissioning driven by price alone is not the best strategy.
It also emphasises the need for social value from procurement and the need to encourage economic growth by ensuring the engagement of small and medium-sized enterprises (SMEs) in the welfare to work market, either directly or through supply chains. It commits to ensuring provider diversity in the market and for regular tendering opportunities at all levels.
There is recognition of the need for contracts to be of sufficient length in order to attract investment and to assure viability. Large-scale DWP commissioning will remain centred on national, centrally designed and managed programmes in order to optimise possible economies of scale. More specialist opportunities and smaller-scale contracting may however attract different models including procurement through Jobcentre Plus to enable local flexibilities or even by third parties on DWP’s behalf.
Integration with skills training
The strategy talks more than previously of the need for co-commissioning strategies with other government departments or agencies, although it comments that ‘contract structures for larger scale programmes will rarely allow for full aligned boundaries with all our potential partners’. It highlights pilots and evaluations in co-commissioning undertaken with Public Health England, the Department of Health and Ministry of Justice but in the case of skills confines itself to working with BIS and the SFA ‘to develop the alignment between the employment and skills systems’. When it comes to skills, AELP would like to see a greater degree of ambition.
Developing sustainable provider supply chains
The strategy stresses that prime providers will continue to carry a responsibility to steward and develop the market beneath the prime contractor level. DWP will not define the detail of supply chain structures but considers that its existing Code of Conduct sets out the key principles governing the values and behaviours of healthy, high-performing supply chains. It also aims to take a more structured and standardised process to minimise transaction costs in order to level the playing field for smaller organisations to bid for larger contracts, including the possibility of standardised Expression of Interest forms to construct supply chains.
More recognition for good performance
DWP expects outcome-focused payment models to remain a prominent feature of future programmes, indicating no substantial movement away from the current ‘black box’ ethos where the provider decides on the type of support needed for each unemployed person. Service standards will nevertheless be set for future programmes and where delivery falls below these agreed standards, DWP will take ‘robust action’.
The strategy also states an intention to develop an approach to properly incorporate past and current performance into tender evaluations, recognising that by not doing so competition is undermined, acting as an effective penalty on providers who deliver. Furthermore, to help DWP identify providers best able to deliver the required outcomes, it will shift the balance in the tender evaluation process toward quality from price. Underperformance will be responded to ‘quickly, fairly and robustly’.
We welcome the general direction of the Commissioning Strategy but the devil is in the detail. The main thrust is that there is a recognition that the DWP should work closely with representative bodies such as AELP in developing the tendering programmes and the shape of the future programmes. We welcome this approach.
AELP’s full response to the DWP Commissioning Strategy can be found via this link.
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