Flexible New Deal - key points

Flexible New Deal will be operating across half the country from October 2009. These are the key points from the contract specifications:

Contracting

  • Flexible New Deal (FND) was designed to replace ND25+, NDYP, ND50+, ND Musicians, PSL New Deals, EZs, and appears to replace ND Self Employment as well. NDDP has just been recontracted and will function separately, as will ND Lone Parents.
  • Phase 1 areas are due to go live in October 2009, with phase 2 delivering from October 2010.
  • The initial FND design is being modified on the fly by the Labour government's introduction of new, large-scale initiatives, which will essentially remove all people under 25 from FND delivery and place them into schemes that look like a mix of New Deal options and the subsidised 'jobs' of the 80s employment programmes
  • The Conservatives do not appear to be in favour of many of the government's changes to FND, including the introduction of new contract types. Until they have clarified their plans, all FND-related tendering between now and the next general election may not lead to actual contracts
  • All but three areas will operate under Customer Choice. This will help prevent the regional monopoly issue that has been raised as an objection to large-scale contracting. However, it doubles the overheads and will make delivery more expensive in these areas.
  • Flexible New Deal may be partly ESF-funded, and is thus not clean for match funding.
  • Payment model - The original payment split (20% service fee, 50% for 13 weeks sustained employment, 30% for 26 weeks sustained employment) has been shifted to 40% service fee, 60% split between the sustained employment outcomes. This will apparently be changed back to the original model after the first two years of delivery.

Delivery

  • Flexible New Deal entry is at one year, or 6 months for fast track customers. According to reports, many people dropping out of existing New Deal delivery through absence or other causes are going straight into the JCP-led FND stages
  • FND lasts for one year, with an optional half-year extension if agreed with the customer.
  • Providers will own action planning throughout FND, all of which will be mandatory and backed by Jobcentre sanctions once agreed. Jobcentre delivery will essentially be limited to signing on fortnightly and co-ordinating some aspects of childcare.
  • The actual delivery content is open. At least 4 weeks of full time work or placement must be undertaken during the year. However, all the FTET, VSO, BET, GtW stuff is no longer required.
  • Whatever content is delivered, must play nicely with the agency that replaces LSCs, and with City Strategies, Local Employment Partnerships and the like. Providers are responsible for paying travel, childcare, food etc. but benefits will still be paid by the Jobcentre as they handle signing on.
  • Referrals and other data will be handled under PRaP, a new electronic system that replaces the paper-based SL2s and nominal rolls that have had thousands of administrators squinting at unreadable faxes and five-part forms for the last decade.

Interpretation

  • Given that the smallest possible contract value was £5m per annum for five years before the recession, providers with turnover less than £10m seem distinctly unlikely to meet the capacity requirements to become a prime contractor. See the separate (and somewhat outdated) analysis of cashflow and welfare-to-work provision.
  • The DWP guaranteed that no DWP staff would be transferred to providers through TUPE. TUPE between New Deal providers and FND contractors has been generally accepted by all concerned. More info on TUPE

Further information

Update 3/7/09 - This section has been updated to reflect changes to FND since the process originally started