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
  • He's not certain that creaming and parking will be major issues. Provider feedback is that it's often impossible to accurately determine how difficult it will be to move someone into work, so everyone gets helped

I was half-expecting a spirited defence of parking as the most rational solution, so the presumption that harder-to-help customers are also deserving of proper support was surprising and in some ways quite gratifying.

If I were being cynical, I would suggest that of course providers would claim they weren't parking. However, accurate initial assessment of customers is well-known to be difficult. What do you think?

I used to work at a place where every meeting with a client you rate their employability on a scale. The ones at the bottom of the scale are the hard cases - they've often been through the system a few times, they've got major barriers such as severe mental health problems or drug & alcohol abuse. You give them a minimum service, put them in touch with other agencies that can help, but they were beyond what we could do.

I've seen enough customers to have a fair idea of how likely someone is to get a job. The ones coming through for the second or third time on New Deal were usually hopeless cases. One of my clients been in and out on different programmes for the past decade, he's not all there and the provider is more like a social centre for him.

Likewise, I often had a clear idea of the people who were not going to get a job. This was often not a result of their attitude - some simply were not capable of holding down a job.

I work for a charity that helps unemployed people who want to support themselves through self employment.
Referrals often come from Enterprise Agencies who get paid by JCP/DWP for setting clients up for Test Trading.
Too many of these people are totally unsuited to self employment and many use this just to keep the DWP/JCP off their case for the 26 weeks involved.

I've always wondered how self employment options stop people from taking advantage of them. It sounds like you've got a perverse incentive right there, with both enterprise agencies and customers being incentivised to pretend that someone is moving towards self employment. Do you have any suggestions on how this could be fixed?

How about the Enterprise Agencies having payments clawed back if client does not remain 'off benefits' for say 26 weeks after Test Trading finishes. In this way they would have a vested interest in sifting out those who were not genuine and to continue monitoring / assisting the remainder to give them the best possible chance of becoming a sustainable enterprise.
Clients could enter into an agreement that if they did not remain 'off benefits' for 26 weeks post Test Trading they agree to a deduction of £x from their benefit income for a period [to be decided] until 'off benefits' and remaining off for 26 consecutive weeks.

That could work. Claw back is a dangerous beast, and means that the payment and reconciliation process would be quite complex. I'm normally a fan of hand-off approaches, where the destination provider discussed the person's case with the adviser and customer, and filters out customers who can't be helped by the provision. This doesn't eliminate the incentive, but it could control it. Is this happening currently?

everyone is moving towards longer term tracking and self employed usually survive to the end of the first year before problems strike. so perhaps bring in a requirement for long term tracking and then make % in work after 52 weeks a performance/quality target. failure to deliver means the contract gets pulled.

claw back schemes are very bureaucratic - i've seen them in action on a small scale and they swallowed up 40% of the admin budget!

The language of something for something that permeates modern welfare thinking does seem to miss the point on occasion. Some people on jobseeker's allowance are simply not employable in the sense of being able to find and keep paid full time work. Saying that this is not the case shows a lack of understanding of the realities of welfare-to-work delivery.

However, they may not have disabilities or health conditions that would make them eligible for IB / ESA, and would therefore have lots of government money and time spent on them on a regular basis to try and 'support' them into work, with mandated attendance on various courses when what would really help would be greater social support or placement into flexible, low hours work. Allowing providers to park customers offers at least some way for delivery staff to recognise this, even if it may also block delivery to people who are not economically worthwhile to support into work.

I don't think you can legislate for every possible outcome, so you need to get the balance of incentives right to get the best deal for your money. Creaming and parking allow providers to define where government finance will get the best return. DWP need to drive up the quality of outcomes for those who are closest to work first, and then work "down the pile" to those with the most severe barriers.

Everyone should have equality of opportunity, but really there are limited resources. Long live selective caseload management.

The early part of this series of messages discusses the pros and cons of provider initial assessment and even goes to state that some people are unable to get and sustain a job.

Playing devils advocate I would say that all people who are on JSA should be capable of getting a job. It is the intial assessment much earlier in the process that has the issues. If they are assessed as suitable for JSA then they should be capable of getting a job and it is then up to the provider to ensure this happens.

If there are people who have had decades of unemployment (assuming that they have been correctly assessed for JSA) it is up to the provider to use their best endeavours to get the individual in to work. If they cannot, then the provider should be discussing with JCP the accuracy of the initial assessment to put them on JSA in the first place.

Idealistic perhaps.

I would love to agree with you. However, this overstates the influence of providers. If an adviser spots someone who is eligible for disability or lone parent benefits then they can assist them in starting the process of claiming. What they can't do is direct someone to another benefit just because they're not going to find and sustain work in a million years.

The entire benefits model has a strong presumption that people are job-ready unless they fit certain categories of unreadiness. Changing that would require a change in the law, and I'm not certain what category and what benefit they could invent to encompass the various non-job-ready people I've seen.

A huge help would be to make the benefit system more progressive. A lot of the people I'm thinking of could potentially find and sustain part-time, flexible work. The emphasis on full-time employment and the disincentives for part-time or on/off work were a major part of what kept them coming back.