Creaming and Parking

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

Site update!

Since the newswire was set up last autumn, it's been gradually building popularity through word of mouth. Most of the industry seems to know about it now, so it makes sense to step things up a notch. Site features now include:

  • Newswire - all editions of the welfare-to-work newswire
  • Knowledge base - a welfare-to-work wiki for industry resources

Third sector organisations and welfare to work

Third sector organisations can and already do bring a lot to welfare-to-work delivery in the UK. However, quite a few not-for-profits, charities and community organisations aren't sure what Freud, Pathways to Work, flexible New Deal and ongoing changes to DWP commissioning mean for them. So, a quick summary seems in order.

Carter & Carter sold to Newcastle College

http://www.ncl-coll.ac.uk/about_us/news....

ERSA has also been circulating an e-mail to the same effect, highlighting that the entire Employability division has been bought out and is therefore secure. It appears that Newcastle College has national ambitions. Who knew colleges could even do that?

LSC statement on the sale - http://www.lsc.gov.uk/news/latestnews/ne...

Relatedly, rumour has it that A4e has definitely secured the Surrey & Sussex Pathways contract previously held by Instant Muscle.

Cashflow and welfare-to-work provision

Cashflow is the amount of money being received and spent by a business in a period of time

Flexible New Deal - key points

Flexible New Deal will be operating across half the country from October 2009. These are the key points from the contract specifications:

NDDP Preferred bidders

So far we've heard that the preferred bidders include:

  • Shaw Trust have won 17 contracts. It's unclear whether this includes the 4 contracts they've taken over from Instant Muscle
  • A4e have won apparently 13.
  • Sencia are advertising for NDDP staff in 4 areas - Glasgow, Greater Manchester, South Tyne & Wear, and Greater Mersey & Liverpool.
  • Reed in Partnership have 3.
  • Working Links won Ayrshire but not all that much else.

Carter & Carter enter administration

Update 26/3 - Sold!

Carter & Carter, who have been in trouble for the past year or so, have gone into administration. The restructuring announced here didn't work out. Unlike Instant Muscle, they are apparently committed to meeting their financial obligations, including on staff pay.

Guardian report - http://www.guardian.co.uk/business/2008/...

Perverse Incentive

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.

Cherry picking, Creaming and Parking

Instant Muscle in administration

Instant Muscle has gone bankrupt, resulting in the closure of their delivery sites across the country. The entire workforce of over 200 was made redundant on February 28th without notice or pay, and many are interviewing for positions with competitor companies.

According to rumour their Pathways to Work contract in Surrey and Sussex is being transferred, with the new deliverer being announced within the next couple of days. However, no official announcements have been made by the DWP concerning Instant Muscle or the fate of its contracts at the time of writing.

TUPE and Welfare to Work programmes

There's been a lot of confusion in the past couple of years over what happens to people delivering welfare-to-work contracts when a new organisation wins the contract. So it seemed reasonable to put what we do know in one place as a primer for staff and organisations who haven't run into TUPE issues already.

What is the DWP Commissioning Strategy?

The DWP Commissioning Strategy is the document which sets out how the department designs, buys and manages contracted employment services. It was published in February 2008, and builds on the recommendations of the Freud Report.

  • 5 to 7 year long Prime Contracts
  • 80% payment on results, primarily 6 month sustainments
  • Contract areas larger than Districts, smaller than Regions
  • Prime Contractors do not have to deliver *any* services directly

Pathways and POEM feedback

The FoI request we submitted some months ago has been partially answered, and it made sense to put what we did get online. We asked for details on:

  1. POEM bidders, their quality and finance scores, and agreed contract values and performance targets for the winners
  2. Pathways to Work bidders, their quality and finance scores, and agreed contract values and performance targets for the winners
  3. Portfolio management applied to Pathways to Work Phase 2

NDDP PQQ results 2007

Owing to the quality of bids, rather more than usual made it through to the ITT stage - between 7 and 12 in each District. This round also marks the entry of Serco into tendering, following their recent heavy investment in building a sector presence.

Analysis - Pathways to Work results

With confirmed contracts on Phase 1 and preferred bidders on Phase 2, it's about time we took a look at how things have panned out for the various bidders, and what it means for the industry.