FND Phase 1 results

The results, announced on 29/5/09, are:

Preferred Providersort iconContract area
A4eBlack Country
A4eCambridgeshire and Suffolk, Norfolk and Lincolnshire & Rutland
A4eCentral London, Lambeth Southwark & Wandsworth
A4eNorth and East Yorkshire and Humber and Tees Valley
A4eSouth Yorkshire and Derbyshire
CalderCentral London, Lambeth Southwark & Wandsworth
Dudley MBCBlack Country
Max EmploymentSurrey, Sussex and Kent
MentorBirmingham and Solihull
PPDGCoventry and Warwickshire, The Marches and Staffordshire
RemploySouth Yorkshire & Derbyshire
SeetecBirmingham and Solihull
SercoCoventry and Warwickshire, The Marches and Staffordshire
SercoGreater Manchester Central and Greater Manchester East and West
SercoNorth and Mid Wales and South East Wales
Skills TrainingSurrey, Sussex and Kent
TNGCambridgeshire and Suffolk, Norfolk and Lincolnshire & Rutland
Wise GroupEdinburgh, Lothian and Borders, Lanarkshire and East Dunbartonshire, Ayrshire Dumfries, Galloway and Inverclyde
WorkDirectionsEdinburgh, Lothian and Borders, Lanarkshire and East Dunbartonshire, Ayrshire Dumfries, Galloway and Inverclyde
WorkDirectionsLeicestershire, Northamptonshire and Nottinghamshire
Working LinksDevon and Cornwall
Working LinksLeicestershire, Northamptonshire and Nottinghamshire
Working LinksNorth and East Yorkshire and Humber and Tees Valley
Working LinksSouth Wales Valleys and South West Wales

This gives the shortlisted bidders the following number of contracts:

ProviderNo. of contracts
A4e5
Working Links4
Serco3
WorkDirections2
Calder1
Dudley MBC1
Max Employment1
Mentor1
PPDG1
Remploy1
Seetec1
Skills Training1
Wise Group1
TNG1

This also means that the following PQQ-shortlisted bidders did not get contracts: Reliance, CDG, DASH Training, Peabody Trust, Prospects Services, Re-gen, Silex, Connexions Staffordshire, RBLI, TWL Training, GSL UK, Reed in Partnership, Shaw Trust, Birmingham Faith in Action, ESG Group, Pinnacle PSG. A few of these (e.g. RBLI) dropped out after PQQ.

Initial thoughts

The Serco, Working Links, and A4e wins are unsurprising, although note that Coventry and Warwickshire, the Marches and Staffs appear to have been rolled into one contract if the DWP table is to be believed. Reed's failure to score a single contract carries echoes of its zero result in Pathways phase 1, but they are apparently going for subcontracting in two areas. Shaw Trust's result is somewhat lower than their usual, but the third sector is represented by Wise Group and (partly) Working Links. As people have commented, a number of these providers are likely to pop up as subcontractors.

So, was there a secret for winning bids? There are certainly patterns to the wins. Where new entrants have brought solid delivery experience and financial muscle from abroad, or where they've invested heavily in building local readiness, they've done well. Where home-grown providers have had the necessary financial backing and size, done their homework, and invested in proper business development, they've also done well.

One particularly interesting rumour concerns Customer Choice. Currently, the official plan is for both primes to deliver across the entire area when there are two in a district. This would enforce direct competition between the two primes. Apparently, the DWP are toying with splitting delivery geographically, so that each prime will get their own half of the delivery area to themselves. Nothing official yet, but it would make life easier and cheaper for the primes, albeit at the cost of damaging internal competition.

Responses

The FT published an article in today's edition with partial FND results:

Launched against the backdrop of unemployment soaring past 2m, the new contracts will be a big test of the “payment by results” welfare model and pose a massive logistical challenge for successful bidders, who will have to set up the new system by October.

An announcement was not expected until after the local elections. But officials brought forward the process to give providers sufficient time to raise start-up funds and hire staff.

Regen magazine have published an article, no new info but a bit of background:

Other successful brokers bidders include Calder, Holland’s biggest welfare provider, which won its first UK contract to become, alongside A4E, one of two providers in London.

ERSA have issued a press release:

The diverse mix of preferred bidders for the first round of Flexible New Deal contracts will bring innovation, said ERSA (the Employment Related Services Association) which represents independent providers of welfare-to-work services.

Amanda McIntyre, Director of ERSA, said:

“DWP has appointed a diverse mix of organisations from the public, private and voluntary sectors, combining existing providers with new entrants to the UK welfare-to-work market. This should bring new approaches towards supporting people into work, so long as providers are given the freedom to innovate

“The promise of more flexible and personalised support for jobseekers must guide the preparations that can now get underway for implementing Flexible New Deal.

“The FND model is intended to free providers from the standardisation and rigid processes of past welfare-to-work programmes, so they can offer their customers what suits them best. The Government will need to resist any temptation to build in prescriptive constraints.

“Prime contractors will need to secure the innovation of smaller providers with specialist skills or local knowledge as they finalise their subcontracting arrangements.

“Flexible New Deal needs to take advantage of the full range of expertise within the provider community. This was always an ambition of FND but it takes on even greater importance in the context of current labour market conditions.

“Of course the unsuccessful bidders for round one FND will be disappointed, but their focus will now be on the many other bidding opportunities arising from the replacement of various legacy programmes with more flexible and personalised welfare-to-work support. They will value thorough feedback from DWP on their FND proposals, so they can learn the lessons for future bids.”