MPs critical of DWP commissioning

The effectiveness of DWP’s contracted provision is sharply criticised by a House of Commons select committee in a report published this morning.

The MPs accept “there is little evidence” of fraud by providers but are concerned about the service standards, the quality of provision and outcomes for customers. The Committee, chaired by Labour MP Terry Rooney, “is sceptical about the new Merlin accreditation standard” and says “there is no evidence” that DWP is exercising a ‘market stewardship’ in practice.

Fraud

The MPs say that “levels of detected fraud in contracted employment programmes are low” and report they have been assured there is “little evidence that there is a problem with undetected fraud”. But they argue there is “no room for complacency; the frauds uncovered to date have highlighted the extent of the risk that could be exploited because of weaknesses in the system.” They call for more severe financial penalties and naming and shaming offenders. They say that stringent deterrents and DWP’s greater use of ‘off-benefit’ checks and random interrogation of claims is the best way to stop false claims by providers.

Customer standards

The Committee likes the ERSA Customer charter but regrets it is only voluntary. The MPs call for:

• customer rights to be given a much higher status
• a universal, monitored, and enforceable customer charter to be introduced
• a ‘Customer Survey’ to enable standards of service to be compared between providers and with Jobcentre Plus

Vulnerable groups

The report also looks at the quality of provision offered to vulnerable groups, particularly those with disabilities. It notes that there is evidence of "parking" in Pathways to Work but welcomes DWP’s plan to pilot an "accelerator" model of payment, where providers receive increasingly large payments per customer as they move more people into work.

The MPs also note that the Work Capability Assessment is leading to more people with health problems moving onto JSA and to a higher proportion of the severely disabled on Employment and Support Allowance. This will lead to providers needing to work with customers with more severe barriers than they had anticipated.

The committee recommends that the FND evaluation should include an assessment of the impact on different impairment groups, and that the new Work Choice programme for the severely disabled should include monitoring by impairment.

Market stewardship role

The committee says, that in practice, “there is no evidence” of DWP acting in a market stewardship role and it documents a number of incidents of “potentially unfair treatment of sub-contractors.” The MPs say that DWP should “clarify what constitutes fair treatment of subcontractors and ensure that prime contractors meet these standards”. They conclude that “despite its rhetoric, the Department has shown no willingness to get involved with even the most serious cases.”

The committee says that is “sceptical about the new Merlin accreditation standard”. The MPs are “very concerned that in cases where the prime contractor is in breach of contract with the Department” DWP declines to get involved. They say that “decisions made by Merlin will have implications for the viability of individual subcontractors and for service delivery”. They conclude DWP should “make these decisions itself, allowing it to ensure the market develops in a way which is stable, robust and meets the needs of customers.”

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“Management and Administration of Contracted Employment Programmes”, Fourth Report of the Work and Pensions Committee (HC 101), House of Commons, March 2010 http://www.publications.parliament.uk/pa...

The specialist adviser to the committee was Dan Finn, Professor of Social Inclusion at the University of Portsmouth and Associate Director (Research) of Inclusion.