Management and Administration of Contracted Employment Programmes - Work and Pensions Committee Contents

1  Introduction

1.  Over recent years the Department has seen an increasing number of its employment programmes delivered through contracts with the private and third sectors. The Department published a revised Commissioning Strategy for employment programmes on 28 February 2008; the Flexible New Deal was the first programme to be commissioned under the new strategy. The strategy aims to create a strong market structure in which 80% of the Department's business is conducted with a "stable core of reliable providers" led by prime contractors at regional and subregional level.[1] The Department expects smaller providers to remain important but they will be subcontracted by a consistent base of top tier prime contractors who must adhere to a Code of Conduct (which outlines best practice in the treatment of sub-contractors throughout the Department's supply chain). Performance will be measured on the basis of both short and sustained job outcomes, with an initial measure of sustainability of six months but looking to build in incentives for up to 18 months. Provision will be externally assessed using existing arrangements with Ofsted in England) and Estyn in Wales and (from January 2010) Her Majesty's Inspector of Education will inspect providers in Scotland. Contracts will be longer and larger than they have been in the past "to enable long term planning and investment".[2]

2.  The Committee carried out an inquiry into DWP's Commissioning Strategy and the Flexible New Deal in early 2009.[3] The aim of this inquiry was not to repeat that inquiry; instead it aimed to look at issues that had come to light, or changed since the 2009 report. Primarily these were the prevention of fraud, the treatment of subcontractors, and ensuring fair treatment of customers, including vulnerable groups. Our previous inquiry endorsed the "black box" approach, under which the Department does not prescribe how providers help customers move into work, but rewards them when they do.[4] However the "black box" applies only to how customers are helped by providers; it never applied to auditing or to the treatment of subcontractors. The Department has also specified in the Commissioning Strategy that its assurance processes would ensure that the hardest to help were offered a good service by providers.[5]

3.  The terms of reference of this inquiry were wider than our previous one, in that they included all contracted employment programmes, including Employment Zones, Pathways to Work, the New Deal for Disabled People, the New Deal for Young People, Prime Contractor New Deal, and the Work Choice Programme (which is still out to tender) as well as Flexible New Deal. These programmes have many differences in the way they are commissioned, paid for, and delivered. Some of our conclusions are generic, and others apply to specific programmes.

4.   The Committee invited witnesses to submit written evidence on 13 July 2009. We received memoranda from 15 organisations: the Papworth Trust, the Wise Group, RNIB, the Shaw Trust, Working Links, PCS, A4e, City Strategy Pathfinders Learning Network, The National Autistic Society, Reed in Partnership, the Association of Learning Providers, the Employment Related Services Association, Department for Work and Pensions, Ingeus Centre, and the British Association for Supported Employment.

5.  On 30 November 2009, the Committee held its first evidence session with Huw Davies, the British Association for Supported Employment; Rob Murdoch, Chair, the Employment Related Service Association (ERSA) and Executive Director, A4e; and Matthew Lester, Vice Chair, ERSA and Director of Operations, the Papworth Trust. The second evidence session with the Minister for Welfare Reform and Employment, Rt Hon Jim Knight MP took place on 16 December 2009.

6.  As part of the inquiry, the Committee also undertook a visit to Glasgow. A report of this visit is contained in the Annex to this report. We are very grateful to Royal Strathclyde Blindcraft Industries, Glasgow Works, Partick Jobcentre and DWP for facilitating our visit, and to all those who took time to meet us.

7.  We would also like to thank Dan Finn, Professor of Social Inclusion at the University of Portsmouth, for assisting us as Specialist Advisor during the inquiry.[6] We very much appreciate the contribution he made to our work.

1   DWP, Commissioning Strategy, February 2008, p 10 Back

2   DWP, Commissioning Strategy, February 2008 Annex 1, p 32 Back

3   DWP's Commissioning Strategy and the Flexible New Deal, Second Report of the Session 2008-09 Back

4   DWP's Commissioning Strategy and the Flexible New Deal, Second Report of the Session 2008-09 para 49 Back

5   DWP, Commissioning Strategy, February 2008, p 22 Back

6   The Committee formally noted that he had declared interests as Associate Director (Research) with the Centre for Economic and Social Inclusion-at its meeting on Wednesday 8 July. Formal minutes of the Committee are available at Back

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