Coalition Government - agrees plan for welfare reform
The new coalition Government has published its joint plan which includes full implementation of the Conservative Party's manifesto for welfare reform.
The Coalition has agreed:
- "to end all existing welfare to work programmes and to create a single welfare to work programme to help all unemployed people get back into work."
- "that Jobseeker's Allowance claimants facing the most significant barriers to work should be referred to the aforementioned newly created welfare to work programme immediately, not after 12 months as is currently the case. JSA claimants aged under 25 should be referred to the programme after a maximum of six months."
- "to realign contracts with welfare to work service providers to reflect more closely the results they achieve in getting people back into work."
- "that the funding mechanism used by government to finance welfare to work programmes should be reformed to reflect the fact that initial investment delivers later savings in lower benefit expenditure."
- "that receipt of benefits for those able to work should be conditional on the willingness to work."
The full text of the agreement between the two parties is published here by the Conservative Party.
In other announcements, the DWP Ministerial team is headed by Ian Duncan Smith as Secretary of State with Chris Grayling and Steve Webb as Ministers of State. Grayling was formerly a shadow Cabinet member covering home affairs. Webb has been a Lib Dem spokesman on social security and was a distinguished academic specialising in social security and pensions.
Adult skills remains within the Department for Business, Innovation and Skills where Lib Dem Vince Cable has been appointed Secretary of State. David Willetts becomes "Minister of State (Universities and Science)" with an "also attending Cabinet" ranking. Other appointments to junior posts will be announced in the next day.
The two key policy documents published by the Conservatives are attached below. These are (a) the releveant pages from the Manifesto; (b) a further policy paper ("A new welfare contract") which adds further detail about a stricter benefit entitlement regime.
| Attachment | Size |
|---|---|
| conservative_manifesto_2010_extract1.pdf | 51.15 KB |
| a_new_welfare_contract.pdf | 171.75 KB |
Comments
sounds interesting, whats it mean
Sounds like the free ride for welfare to work providers is shortly coming to an end.
Adam, it's astonishing how totally wrong you can be about something with such absolute certainty. Free ride? Hardly. This is a tough industry where many providers are doing excellent work to support people into work and keep their head above water. Most of the problems in this industry are caused by flawed procurement which underpays for outcomes, thus encouraging creaming and parking. Better funded programmes is what providers need to support customers, not a race to the bottom.
Adam..... You are absolutely correct.
Now that the Free Ride is over, where any unemployed candidate assigned to some inappropriate work placement without merit may be promoted as being a "Positive Outcome" to the W2W Provider (hence sanctifying its delusion that it was helping people back to work - not forgetting the possible financial implications in terms of bonus payments from Job Centre Plus), Job Centre Plus may reclaim territory which was previously within its bounds. I am sure that staff within the soon to defunct W2W agencies may soon re-enter the mainstream Job Centre Plus organisation, and apply for jobs at a comparable level to their previous status as Admin Clerks - irrespective of whether (as in various W2W Providers) they self-annointed themselves with the baloneous title of Consultant.
Good Riddance to W2W Providers.
I am not sure Adam or Prometheus have read the article properly. It means a significant growth in the activities of welfare providers - both in terms of the time they engage with customers - straight away and at 6 months (earlier than FND) - and also scale - as the work programme brings together a number of other smaller programmes. It further means that significant financial investment is needed to deliver these contracts - so increasing the overall scale and value of the market at a most significant rate - and finally clearly implies welfare provides taking JCP functions not the other way around . I have found that opening my eyes before reading helps - although it is difficult with blinkers on.
Thank you Highpark for a very fair question. What does it all mean? Well, no-one really knows quite yet.
The most important principle here is to avoid wild speculation. Too many scoops these days are just plain wrong. The Indus Delta mantra in these strange times is simple: facts not opinions. We are here to provide an independent but informed bridge to the industry. Users should definitely feel free to debate. But we shall stick to what is known. And then we'll tell you straight away.
Prometheus
Sorry but (like Adam) you are wide of the mark here: The new Work Programme will if anything shift work away from JCP and towards providers. Hence the Coalition statement this week emphasising that unemployed people facing barriers will be immediately referred to providers, young unemployed after 6 months etc etc. There's no doubt that the whole market will shift towards those large primes (and their banking partners) who can sustain the working capital requirements of very large contracts with outcome payments over an extended period and deliver through supply chains comprising smaller W2W providers. It will be an arguably more challenging market with a stronger incentivisation to achieve results. Sorry if that seems an inadequate come-uppance for the despicable W2W field.
Sybil
NB "Baloneous" - wasn't he a Greek god of something or other?
The current government is committed to making cuts in all departments, and that includes provision of services for the unemployed, as is well know in the industry payment will now depend on long term employment, as opposed to short term employment. Anyway, it will be interesting to see if the government will be able to afford to carry out their agenda, given the hight cost that this will entail.
The only government department that will not have their budget cut is the Department of Health.
Funny old world this, but I feel obliged to observe that the new Government could easily increase the "spending" on welfare-to-work programmes. I use the word "spending" with care because it might not turn out to be public expenditure in the terms that are usually understood.
Check what the Coalition agreement says about "the funding mechanism used by government to finance welfare to work programmes should be reformed to reflect the fact that initial investment delivers later savings in lower benefit expenditure." In the jargon this is the "DEL/AME switch" but in simple parlance it means they will raid the benefit budget to pay for programmes that ultimately reduce the benefit budget. However - and here's the trick - they need delivery organisations prepared to accept transfer of risk if it does not work out.
Whilst technically the writers above are correct that the new proposals will generate incresed volumes for providers, it will not automatically bring with it "easy money". Part of Tory aims will be to reassess everyone on IB. Now, I would not like to be held to account for the precise numbers, but a brief browse suggested this amounts to approxiamtely 2.6 million people. I would suggest they are unlikely to have all these assessments done quickly, however those assessed as being suitable for work will frequently bring with them a multitude of problems and will undoubtedly be far from ready for work. For example, according to Theresa May, there are approximately 16,500 substance misusers currently in receipt of IB who should be categorised as suitable for work. On the basis the DoH can't agree on a suitable treatment programme for substance misusers, how do they hope to get them back to work??? Even if providers achieve this - and historically we haven't been overly successful, it will require substantial in-work support for an extended period at probably great cost to the employer and provider.
Furthermore, the Tories are legally tied to FND 1 for about another four years, so unless they are prepared to offer Serco etc some kind of comepensation it seems likely we will have FND running alongside Work Programme. Of course this resupposes the Con-Dems last beyond the autumn.
Finally, we have to wonder how they will standardise delivery to incorporate such diverse programmes as Work Choice, FND, Response to Redundancy and Pathways to Work. Perhaps that is why they chose IDS as Secretary of State - afterall, we know the acronym stands for 'in deep ****'.
@Welshman the government are not legally tied to FND, or any other contract, as there are Change Control clauses in all current DWP contracts that state (abbreviated version):
5.1 The Authority has the right to propose variations (including a request by the Authority for the Prime Contractor to cease any one or more of the Provisions or Provisions) to the Provisions in accordance with this Clause 5.
5.3 Without prejudice to the generality of the Authority's right to vary this Contract, such variations include, but are not limited to the following:
5.3.1 cessation of any part of the Provision(s);
This allows for them to withdraw the contract but you are right, there is also a clause that states that the Prime Contractor "shall be entitled to payment for any agreed additional costs it incurs as a result of any such changes on the basis set out in this Clause 5". The question is, who will determine the "agreed additional costs" and would this stop the coalition government from making the changes they want to as early on in their term as possible.
And, of course, those same clauses would allow them the option to convert fND to the Work Programme (tWP - a new acronym?), including shifting payment structures far nearer to 100% outcome-based.
Unlikely as the Work Programme includes fND/ND and other programmes like Support Contracts, PtW and CTF so they couldn't just give the contracts to fND providers without the other Primes being involved. I think there's going to be a "fun" summer of tendering - joy!!
I'm staying away from words like "couldn't" & "can't" for the next month or so........
Lol! I agree with the bigbaldbloke!
Does anyone know if Lord Freud has spoken with the primes to determine the appetite for contracts with a higher % of outcome based payments in the current uncertain economic times?
"Has spoken with" - I doubt.
"Will speak at" - More likely.
"Will go ahead & do, irrespective of provider views" - The safe bet.
http://news.bbc.co.uk/1/hi/uk_politics/8685989.stm
I've not seen much mention of the DEL-AM switch and the move to 100% outcomes, which the conservatives were committed to a few months back. I presume that we'll hear more about this at the time of the emergency budget. Anyway, it looks like the W2W industry is going to get a drastic economic prune.
Today's expansion on the coalition agreement again makes mention of DEL/AME, although there's precious little extra detail on when things will change.
Work & Pensions has to cut its budget by £535 million (just seen this), but they want the private sector to take on their new work scheme. I presume that they will use the DEL/AME switch to achieve this (they need to alter current HM Treasury rules first). It will be interesting to see how all this works out in the future.
A really good idea now is for everyone in the sector to look at their transferable skills and think about the future. Sorry to say there are hard times ahead. Good luck.
Ah Adam, take a deep breath, step up to the plate, the goals still the same - get people into sustainable employment, where I come from its about commitment, not the free ride you alluded to above, let the real w2w people get on with the job....
It seems some in the industry are not aware of the impact of the DEL/AME switch plus the 100% outcome.
@Whiteknight44: Wake up and smell the coffee and come down from the clouds. At present, we are in the midst of a severe "economic crisis". Where are all these sustainable jobs going to come from? There are too few jobs out there and too many people chasing them. You are right, we need commitment, but commitment from the government of a real jobs creation scheme, not budget cuts (£535 million + more to come?). There will still be a w2w industry, but a leaner, meaner one.