FND phase 1 cut by 35% just before launch
FND phase 1, due for launch across half the country in October, has had its expected throughflows cut by 35% across all contracts. This follows on from the approximate doubling in expectations that occurred earlier this year, so the expected number of customers is still slightly greater than the initial FND tenders.
Unfortunately, having doubled premises, staffing and subcontracts, some providers are now having to make redundancies and cut subcontractors at the last minute. It appears that other providers were expecting this and had taken the precaution of not actually recruiting the extra people.
It also appears that the delay in announcing FND phase 2 shortlistees is partly down to recalculating projected throughflows for the ITT pack, which goes out to bidders at the same time as the announcement.
Update 1/10 - Employment Minister Jim Knight (!) has responded on the story as follows:
"Our priority is to get people back into work as quickly as we can and we're not going to apologise for fewer people reaching twelve months unemployed than anticipated earlier this year.
"The money we save can then be reinvested in those early interventions which are paying off and getting people into jobs, jobs that help them support themselves and their families.
"The contract is clear that the volumes are not guaranteed and most contractors agree with us that lower unemployment is a great thing."
The implication of the response is that the numbers aren't there because Jobcentre Plus is doing a better-than-expected job of getting people back to work before they hit the provider stage at 12 months. The favoured explanation in the industry appears to be that the unexpected gap between ILO and JSA unemployment figures wasn't reflected in the DWP projections until last week. Another possible explanation is that the impact of the Young Person's Guarantee wasn't taken into account.
Comments
[Moderation - The following comments have been moved from a contracts award discussion elsewhere on the website, as they concern the drop in numbers. They also discuss people's experiences of subcontracting and FND implementation generally]
All delayed till next week again - what a surprise. In the meantime the FND1 primes are all now being told to expect about 40% less referrals than they had bidded for. Not sure whether it's just JCP living up to their previous reputation for accurately predicting stock and flow, or whether someone's just woken up to the fact that
the Young Person's Gaurantee directly competes with FND in some areas. As this Govt can't organise a piss up in a brewery I suspect it's both.
Scout, delivering in North Wales have today announced they are pulling out of FND delivery in Anglesey and Gwynedd. With just days to go for TUPE staff. Brilliant.
Amdend my last comment to "Scout are pulling out of delivering FND STAGE 1 in Anglesey and Gwynedd".
Is wondering why scout were allowed to go this far in the game only to let the North Wales staff down at the very last minute. It's grim news for all those affected
I wonder how TUPE is affecting all the FND areas, perhaps Daniel could track any issues or positive stories over the FND launch period?
Well If what Raven says is true and they can expect up to 40% less referals, Scout won't be the only ones chucking in the towel.
Is it a 40% drop in FND1 referrals across all areas? Surely someone must have noticed the true numbers were way below the anticipated referrals before now.
Raven - I spend nights lying awake worrying where this Gov't are leading us all... up the garden path perhaps dum dum
I cannot believe there is so little info and even less comment on the DWP disaster of having previously informed fnd phase 1 primes that they can expect 40% (minimum) more referrals than they are actually going to get. At this late stage it is unlikely there will be sufficient vacancies for TUPE transfers for those poor w2w staff who will now find themselves compulsory redundant. What is going on when we find ourselfs with the highest unemployment rates for decades, that we are now adding to the unemployment figures (me included after 30 years in the industry)made up of professionals whose sole career has been based on getting the long term unemployed back in to work. Right now my heart is bleeding... heavily.
This strand is getting confusing. It is jumping for fND2 to support contracts and Scout Enterprse pull out. I am finding it hard to see what answer relates to what. Any chance of a heading.
Scout.
Scout Enterprises were not delivering Stage 1 anywhere, stage 1 is JCP.
Scout were delivering the first part of FND stage 4 ( provider led ) in set parts of North Wales, from interviews I have had selection for this is based on the best provider to deliver the best service for the client. With an expanding Enterprise focusing on the growing recycling market and new initiatives from Cyclch Wales Scout are very well placed to deliver Mandatory work based Activity as well as front line services and that is their choice. Daniel published the ND performace results recently they were on par if not above some of the other contrators. On flows information from programme centre provision is reporting numbers in the area are up and not just up but the clients are looking for very different work to the more traditional Welfare to Work client. These clients with higher skill level are more demanding individuals they have a deep rooted work ethic and they drive, yes, a job brokers dream come true. I am a provider hoping to get an opportunity to work with these clients in this area. TUPE staff if it's us get ready to up the Aunty cos we will be on our hind legs 6 hrs a day looking for work to suit the client. Finding work may be tougher but it is still out there.
[referencing an earlier post by Newly Unemployed]
They have clearly made a pigs ear of this and there has to be some sort of post investigation. I have never known a contract to have an 80% variance (+ or - 40%). Think of those providers that have bought premises, recruited staff and build systems to deal with these volumes - will they get compensation?????? I doubt it!!!!
The volumes debate, whilst interesting, probably does actualy deserve a heading or a page of its own somewhere, Daniel. But in the meantime....
The 40% I understand varies a bit from region to region but seems to average out somewhere in the area of 35% (ie 35% under the revised ITT volumes, which is about 200% of the original bids). It is difficult to understand why such a serious piece of information was kept under wraps for so long. DWP are claiming that it's all to do eith "unknown territory" and the fact that the historical ratios between ILO and JSA don't seem to hold true anymore, and they've been double checking figures. In view of the fact that JCP's record in stock/flow projections over the years is about as good as Gordon Brown's grip on reality I can understand that DWP probably really did keep asking them to go away and add it all up again, much like the EU keep telling the Irish to vote until they vote the right way....but that's another story.
I also gather that it's come out that some PCs have had 40% tolerances built into their contracts with DWP (40%????) but that they hadn't told their subbies this and instead contracted them to 15%. Nice and ethical!
[Moderation - this is quoted in part from this post as it concerns FND roll-out]
I went through the same painstaking process as yourself and gave up some really business sensitive information and a shedload of intellectual property. Our reward: microscopic contract offers with all the performance targets for 34% - 40% of the funding.
I'd really recommend complaining. It will probably achieve absolutely nothing but it's very cathartic.
We have now walked away from all FND subcontracts. I've made the necessary redundancies and other staff have TUPEd over (Primes have actually been very good with this) so I don't have the worry of how the 40% budget reduction is going to cause further havoc to Primes and their Supply Chains.
Somebody on this forum told me that you're probably best out of FND. I disagreed at the time but looking at it now, FND has all the appeal and charm of a timebomb. If Primes were saying they won't break even until year 3, I'd imagine the funding reduction will now make the whole programme unprofitable, especially if they've already staffed up for the original volumes.
Or in the case of one particularly [...] prime provider...staffed up a lot and then halved that staff before delivery starts.
[Moderation - please stop identifying providers when making unsupported allegations. Sidelong references aren't a get-out on this]
Ok well here's the support. [company] originally recruited 140 advisors to work across it's [city] FND contract, which is now down to 70 with people having been made redundant within a week of starting. Not so much unsupported as true.
[Moderation - ok, I've contacted the company concerned and they have specifically rebutted your claim. More generally, unsupported claims are not the same thing as false claims. It means that they're being made by anonymous internet commenters without reference to easily available confirmation. Anyone can say anything on here, and there's no way that I or any other user can verify it. Therefore I try to remove potentially damaging allegations that identify the parties involved, unless there's strong, easily verifiable evidence for what's alleged]
No comment
Moderation - please stop identifying providers when making unsupported allegations. Sidelong references aren't a get-out on this]
How come you don't pull people up if they make a comment saying something like - I've heard A4E have won FND2 in the highlands!!!
This too is an unsupported allegation but you appear to be quite happy to read these things and leave them on the site!!!
Swapping rumours about who has won which contracts is not the same as making a 'potentially damaging allegation'. One of them is potentially libellous, and I could be forced to reveal anything I know about the identity of the poster by the courts. You don't get to libel someone freely just because it's the internet, I'm afraid.
I am becoming more and more suspicious of a lack of political will to move fND 2 forward in the light of fND 1 shortfalls. If the process for fND 2 gets delayed any more we will be in the run up to an election before ItT gets issued!!
The 40% volume reductions are not going to materialize. JCP/DWP assume that stages 1-3 of FND (ie the bits that they do) will eliminate the vast majority of new claimants in the first 12 months. I don't think they will be as successful as they hope. Second point is that the picture varies significantly across the relevant districts with inner London, for example, having much lower volumes than predicted and other areas in the south east seeing much lower reductions when JCP's own centre by centre figs are analysed.
Month 10 of JSA for 18/24s YPG may have an impact on numbers but I know for a fact that the stock of 25 plus customers is weighing heavily in jobcentres - can someone explain why the 35% reduction is the case yet? I dont understand ? and I dont like where TUPE is going . Im hearing the word redundancy and Im getting nervous
Q: Why were the volumes cut?
A: Transpires it's not much to do with Young Person's Guarantee. It's because when the original volume projections were done - the ones that put up the original original ones by 300% - DWP had used a historical ratio that compared actual JSA figures to ILO figures. They then noticed as the year went on that this ratio didn't apply any more, which meant the figures they'd given everyone previously were bollocks. So they made a new ratio up instead and came up with whatever the latest figures are that they've published. Nice to know welfare to work strategy is in such capable hands.
I work for a successful prime within the Midlands and do not think that these 40% cuts will happen - just before the end of prime contract, Jobcentres were increasing volumes of referrals to providers at an alarming rate just to get them through before FND started. Although I would expect there to be a slowish start to FND I believe that this will be more down to Advisors getting used to the new systems etc... afterall, the unemployment rates haven't gone down have they?
The intended Jobcentre back to work support for their customers is only likely to have limited effect as they are getting untrained staff to deliver these back to work sessions.... what makes them believe that there untrained staff will be more effective than provider staff is a question for them, but I fully expect the customer flows at a high level - whether there are enough sustainable jobs out there to make it profitable is another question altogether. Removing the recruitment subsidy and advisor discretionary fund from stage 4 providers seems a really bad idea and makes it all so much harder.
Thanks for the comment Soul provider. On a related note, the previous experience in recessions has been that ILO and claimant rates of unemployent move much closer together. The issue this time appears to be that JSA is so unattractive that people just aren't bothering, but this could well change as their savings run out and they don't find new work to move into.
Right now, it's difficult for me to predict what's actually going to happen to industry staff. A particular complication is that large quantities of DWP money are going to the Young Person's Guarantee, and YPG spend creates far fewer jobs for employment support staff as the majority of it goes on customer wages, direct payment to employers, and skills training. I'm trying to figure out the impact at the moment, but my guess is that there's enough money left overall that it will reduce new recruitment rather than slashing total number of staff in the industry. Of course there will be people who lose their jobs, because the distribution of that money will have changed a bit.
Jim Knights comments are astounding. The majority involved in this game are not disputing the fact that lower volumes coming through to FND because they are in work is hugely positive. What I want explained is why the figures issued in February were potentially 40% out. The explanations suggested to date around ILO/JSA and impact of YPG simply don't wash. Our deliver model was built around the February volume assumptions with tolerances throughout the contract period. To advise us the week before we go live that the figures have been revised by upto 40% is frankly amateurish and Jim Knight might as well go and work in DWP as a statistician if he thinks his response is adequate.
Perhaps DWP could be a bit more transparent in their volume assumptions and allow us to make up our own minds in future regarding volumes.
tup'd today to new company delivering fnd, how long will it last? was told this morning the tup'd did not stand with new contract, then told all ok, start work on monday for new employer, now awaiting unfair dismissal or redundent...
I rarely comment on this site but having had sight of the DWP memo under discussion I wanted to throw my thoughts into the mix.
I work for a prime contractor who received this national announcement regarding flows from the DWP about them potentially being 40 less. Unfortunately this announcement does not take geographical differences into consideration. Some areas of the UK will have significicantly less flow, however other areas, such as Birmingham and the West Midlands for example I would expect to have similar to the anticipated levels of clients because of particularly high unemployment. Making a blanket announcement such as the DWP has done just indicates the unacceptably poor management information systems they are using.
Ground staff at JCP are providing wildly different figures from the DWP announcement about expected volumes however with these working on a localised level the information will be far more accurate.
Unfortunately for both Primes and Subcontractors this means making conservative decisions regarding staffing leading to higher caseloads, lower ongoing investment in infrastructure and support roles so therefore evidence indicates a smaller percentage of the unemployed finding employment as a result.
This news may not come as such a surprise to most primes because many have worked with DWP in the past and will have prior experience of DWP "forecasting". It is likely they will have commissioned independent study specific to their region and have a good indication of realistic flow. I hope Primes took these precautions minimising the need for businesses to be forced to make redundancies.
Working for a sub-contractor for FND and ex-prime for ND. We have indicated for some time to our prime that from our knowledge of area and own intelligence that we expected customer flows to be 65-70% of profile, at best...
This has been largely ignored by the prime (who are relatively new to mandatory programmes) who expressed 'confidence' in the DWP flows and have planned (and recruited) to meet these flows where they are delivering themselves. Despite pressure from the prime we resisted over-resourcing and now feel justified in this more conservative approach.
No wonder DWP have cut back volumes by 35%...
Repeated at a number of Jobcentres today in fND areas:
Customer "Hello, I am here to sign on. I have heard about fND - can you refer me to xxx?"
DWP staff "fND? Whats that then?"
LOL
Classic.
Has anyone met anyone at DWP who knows what fND is?
We are a subcontractor and have spoken to 17 DWP front line staff across 3 districts none of whom knows what fND is let alone how to refer people.
Customers referred to us at the end of the first week = 0
What a farce!
Front line staff, ie signing clerks, may not be too aware of what Stage 4 entails, so I wouldn't be too surprised at that.
Our office set up one adviser to do Pre-Provision interviews initially. Referrals are split exactly 50/50 between our two local primes. Until PRaP is live, a clerical sheet listing names and with Action Plans attached is sent off to District Office for input to PRaP when it goes live (at least this is my understanding).
Whether this clerical system is being used in other districts and regions, I couldn't tell you, but I'm sure it's all in hand.
In response to ahomage.... i love your confidence! As a subbie, number of referrals received to date 0. Anyone actually got any yet?
We're a specialist subcontractor and had DWP attempt to refer 3 people to us directly the other day.
What I thought was excellent was that the member of DWP staff was fully informed about fND and knew how it would benefit the 3 people he wanted to refer and we were jumping up and down at the prospect of our first referrals.
Sadly no one seemed to have told him that his area is part of phase 2...
I used to be a civil servant (not DWP)so I assure providers things take time to filter through a very bureaucratic and complicated system civil service. I'm sure that by Nov/Dec you will start seeing the first FND clients arriving at your offices.
Have had a good number of referrals this week.
It's all about leg work and getting into JCP and talking to Advisers to let them know what its all about. Been doing that for a few weeks before go live and without it would surely have been in a boat, with a hole, without a paddle and up the "famous saying" creek.
Astoundingly (but not surprisingly, having worked for the Deaprtment for a long time prior to "jumping ship") Advisers and their Managers have had very little information. For those of you who've been in this business for a while - you know how it works! Get out there, promote your provision and the referrals will come.
Granted - getting an audience is difficult, especially in a dual provider area, but it can be done.
I also agree with Flibble, different goegraphy will influence flow numbers and in some CPAs the reduction assumption of 40% won't be anything like.
Ahomage - different JCP offices seem to be referring in very dirrent ways - even within districts. I agree PRaP should make life easier but two - three weeks delay makes a tight programme even tighter.
We have had over a hundred referrals and our first inductions start monday, JCP have had a visit and we are expecting the advisers to come back in a couple of weeks, That is how you get the business - oh that and a 5 bar gate clerical system to share out the customers between the dual providers
I know in the Edinburgh area and the Lothians that the referrals have been majorly slashed - Especially now that A4e and WiseGroup hasnt agreed a contract in week 2 of fND and within the contract both providers have to get 85% off the clients into jobs by the end of October and the to be paid for the 13 weeks sustainable employment period? Hows that going to happen? And Contact has to be made witin 24 hours of the provider getting the clients referral onto the system? This i will find interesting as to how its going to happen!! Watch this space!!