Conservative plans become clearer

David Freud and Theresa May popped up at a number of events this week. Possibly the most informative appearance was by Freud at the Social Market Foundation's event on Wednesday, where their plans for existing and future contracts started to come into focus.

If FND phase 2 contracts haven't been signed, then there are two options:

• If the existing FND2 specification is flexible enough, Freud estimates that around two months would be needed to change the specification into something closer to the Work Programme and negotiate contracts on that basis
• If the specification can't be transmogrified, the FND2 round would be cancelled and a new procurement undertaken, with an estimated duration of 6 months

The fate of existing contracts is still not entirely clear. The general approach appears to be that they will be allowed to continue to their earliest contracted end date, with subsequent delivery merged into the Work Programme. It's notable that both Work Choice and FND2 have a 'meta' clause in their specifications allowing the DWP to change the specification at a later date:

• FND phase 1 is signed and delivering, so changes will need to be agreed with providers
• Pathways to Work will continue delivery until end of contract, so IB / ESA claimants may not enter the Work Programme for a few years. This is also presumably the case for NDDP contracts in JCP-led Pathways areas
• The remaining New Deal contracts may need to carry on for a bit longer to fill the gap, if FND2 start is delayed by its conversion into the Work Programme
• Freud confirmed that there will be no specialist disability employment programmes sitting outside of mainstream delivery, arguing that this went against the inclusion agenda and that differentiated payments offered an appropriate solution. Given that Work Choice contracts are likely to be signed and delivering by May 2010, this plan may not be implementable in the short term. Right to Control wasn't covered, but may also have an impact on contracting
• Nothing was said on ESF, DAF, Support Contracts etc.

AME-DEL and differentiated payments

Three categories of customer were identified by Freud as ones with very low 'deadweight', i.e. a low chance of finding work without external support:

1. People moving from IB into the ESA work related activity group following reassessment
2. People moving from IB onto JSA following reassessment
3. Cyclers - the group of chronic repeat claimants identified by the SMF in their report earlier this year, who Freud identified as those claiming JSA/IB for four out of the past five years

The plan is to use AME DEL funding to pay much higher outcome rates for these groups out of the benefit savings made by getting them into work. This would presumably slot into the wider differentiated payments system, which is envisioned as using a categorisation approach to paying more money for outcomes by clients identified as being more difficult to place. Ian Mulheirn of the SMF mounted a spirited defence of the accelerator model (paying more for each person in a cohort), but the most that Freud would budge was to raise the possibility of individual accelerators within each category of customer.

There was also a discussion on the Conservative target to reassess all IB claimants, with Freud agreeing that it would be difficult to achieve, although he was hopeful.

Creaming and Parking

How to best target support is still a very live issue, and one that Freud freely admitted was difficult to discuss publicly. There was some discussion about the existence of a group who are so expensive to support that any outcomes aren't worth the effort. More than one person claimed that it was impossible to predict who would get a job, so all customers are helped equally in any case.

Dave Simmonds of Inclusion argued that creaming is generally a good thing, but that parking is never a good thing for the individual being parked. He did however raise the defence that it was sometimes necessary at certain stages of the economic cycle (i.e. during recessions), presumably due to lack of resources and lack of available jobs. He pointed to the example of California, which has had to suspend its very high levels of conditionality for lone parents as it can't afford the support programmes, instead allowing claimants to simply pick up the benefit on a regular basis.

Your correspondent was cordially invited to withdraw a question about the potential conflict between provider parking and Jobcentre conditionality (i.e. sticking someone in a cupboard for a year then sending them on workfare).

The future of Jobcentre Plus

Freud was very firm on the future existence of JCP, and pointed to its importance in handling payments, sanctions and conditionality.

Resources

• Nick Timmins of the FT was at the ERSA conference, and produced his own take on what's going to happen
• Regen coverage of the SMF event