Can't see the wood for the trees? You need our free industry newswire
What do you think of flexible New Deal?
by Daniel on 7 May, 2008 in
I was talking to consultants this morning who are trying to decide whether to recommend investing in flexible New Deal (FND) prime contractors. I couldn't give them a straight answer. Can you? Will it give providers the freedom to truly help people, or the freedom to harm them? Are you looking forward to it? Are there any problems with the existing New Deal that it might solve? Write away!
»
- Login or register to post comments
- Email this page
Largely depends on the quality of the clients being forwarded by DWP/JCP. Remember that these clients have already been intensively 'coached' by JCP for 12 months so the individuals appetite for work is critical.
I'm going to have to kick some people around and get them to post on this. Surely you've got some opinions?!
Some providers have solid experience in delivering flexible programmes, eg Employment Zones. Even so it will be difficult and risky to predict performance on FND. Given that making a profit in the programme depends so much on outcomes, there's a very large financial risk for organisations taking on the contracts.
I think that, even with Customer Choice, providers will have a lot of power to push the DWP around. The winning bids are likely to offer such high performance that no provider will exceed their offer and make above-prediction profits. What happens if a third of contracts underperform?
My understanding of FND makes me think it is a small positive step, assuming DWP don't totally balls up the procurement. The contract size and focus on outcomes moves DWP away from wasting money on contract management and non-performers.
I'd be interested in seeing exactly how work trials are defined. I can't see UK businesses being over the moon about taking on thousands of recalcitrant jobseekers for work placements. The LEPs will have a long way to go before they can pull that out of the bag.
Speaking of ballsing up the procurement, there have been rumours circulating that some providers have been taking advantage of their size to negotiate for better terms from DWP contracting. I can't see any real evidence of this from the outstanding ESF contract awards though - Tomorrow's People, BEST, ERP, and Stoke on Trent College are none of them massive. It does raise the issue of what happens if providers become too important to allow them to fail.
With regard to saving DWP money on contract management, I know what you mean. However, Dan Finn at Portsmouth wrote in a study a while back that large contracts in Australia and elsewhere did not necessarily remove government intervention and micro-management: any perceived unfairness or harshness in delivery could result in tremendous pressure on the DWP to intervene. For example, what would happen if an FND provider decided to park all customers with major disabilities or health conditions?
The focus on outcomes is the driver to saving the DWP money. Money is saved by not being as involved as previously in drafting, managing and implementing contracts and only paying a bulk of the contract against defined outcomes.
So far as large organisations negotiating better terms is concerned, that may be the case in some instances but how much better I think is unlikely to be very much. I do not think the DWP will be unduly concerned about any organisation going 'under' [see Instant Muscle] so long as there is another prepared to replace it.
Regarding 'parking' awkward cases, this will undoubtedly happen but the qustion is to what degree this occurs. I am not privy to the detail of the contracts but would presume there is a performance measure along the lines of x% of clients/customers taken on to meet the off benefits check otherwise there is scope for taking on all the clients/customers you can and cherry pick those with the best chance of getting work whilst you 'park' the rest.
Not wishing to bring up the whole parking issue again here but, if they are driven by outcomes, providers will park people based upon their proximity to the labour market. As long as this proximity is not judged on the basis of their disability, race, gender, etc then it seems pretty bloody fair to me. Get those people into work that can as quickly as possible. Providers have a political game to play to manage perceptions of this - helping people to understand that this approach is best and reducing the negative impact of parking. The threat of micro-management by DWP should be enough to keep providers canny about how they promote themselves.
WakingDragon, your point links back into the current Question of the Week - how can you tell if someone is job ready? Some providers are claiming that it's not possible. I would argue that it is, but that it's very difficult to exclude health conditions, disabilities, basic skills needs, and willingness to work from that calculation. Gender, race, whether someone lives in a deprived estate, and many other factors also affect someone's chances of finding work.
Maybe it would be useful to have an honest conversation about which things should and should not be considered. The alternative is a dishonest situation where anything goes as long as it can be swept under the carpet, in the same way that some recruitment agencies discriminate against whole swathes of society for fear of displeasing their employers.
As per my comments elsewhere - job ready - on job readiness. But I think the issue of parking is key. Consider pways for example. the govt. aims to get 1 million people back into employment from IB but there are c. 3 million people on IB so by default a large number will be parked.
Also, it seems to me that most providers are ill equiped to deal with clients who enter the parked category. Working with these clients could incur substantial losses unless the provider really knows what they are doing. There are, without doubt, processes, techniques, mechanisms and interventions which can be applied to shift a lot of people currently parked - assuming they will want to be shifted. people can be encouraged to want something - but then the ethics come in. Will the person actually be better off - forget the financial side (see below) - in terms of their life (and forget QoL measures for now). If they won't then why try and shift them?
The financial side. I came across an excellent example. The financial calculations showed someone woudl be £320 a month better off in work. Their response (paraphrased): so i'd be working for 80 quid a week, giving up my free time, answering to somebody else, and doing something I don't want to do. For £80 a week. Would you do that?
Re bills comments - customers need to understand wages replace benefits - not necessarily outweigh them in monetary terms. I would much rather earn my income than have to claim it, but some customers just can't see this..The problem is second and third generation benefit recipients - they can often be the odd one out if they want to work.
Re wakingdragons comments - Micromanagement by DWP...that'll be the day!!I think you'll find the attitude will be "You're on your own mate...12month plus is nothing to do with us!"
My concern is that - inevitably - providers will be attracted by the big money on offer here.But they will also have to deal with the hardest to help customers - and what can they do that is different, new, and engages the customer ( who will have multiple barriers to work, not just the ones we pigeon-hole them into). I'm not saying it can't be done.. I just wait to see with interest
Thank you pamplemousse. It's good to get another perspective on the contracting process. There's an interesting question about 'making work pay' - I think you're right that many people are willing to take on work that isn't far above their current levels of income, *but* it's vital that they have transitional support of some kind to smooth out the transition, such as the Return To Work Credit. Going back to work often costs a fair bit of money - buying a travel card or leasing a car, sorting out new clothes, paying for childcare, plus paying rent and other living costs in the gap between benefits phasing out and the first salary payment.
With regard to micromanagement, this may be an issue with contract management teams rather than at individual jobcentre level. The experience in Australia is that the 'black box' approach has gradually been phased out, as the government comes under huge pressure to reign in perceived injustices and take responsibility for provision that it's mandating. Thus the providers there have ended up delivering increasingly defined programmes rather than being allowed to do what they want as long as they get people into work.
With regard to hardest-to-help - yes, there is a risk. It's only possible to make a good estimate of how many you can get into jobs if you have a good knowledge of how hard they're going to be to help. Providers with Employment Zone experience are probably in a good position to know this, as a large part of their core client base would have been New Deal repeaters. We may see some providers desperately trying to renegotiate their prices upwards if they discover they've got the sums wrong, or if the economy makes it substantially more difficult to place people.