A shifting market share for failing providers of the Work Programme?
13 December 2012
The Work Foundation was pleased to have the opportunity to hold an event on Tuesday this week (11 Dec 2012) with the Minister of State for Employment, Mark Hoban. Although the Minister, understandably, didn’t reveal anything too shocking in response to the audience’s questions, several interesting topics were raised.
Firstly, and this has been hinted at elsewhere, Hoban intends to use ‘carrots and sticks’ to improve the performance of Work Programme providers, with an emphasis on the ‘big stick’. Although he did not go into details about exactly what wielding this ‘big stick’ would entail, the original Invitation to Tender (ITT) states that ‘should Providers fail to reach minimum levels for any of the customer groups; it will lead to contractual action up to and including contract termination if improvements to performance are not made’. Failure is defined as not achieving a job outcome rate of 10% higher than the non-intervention level (5% in the first year) . As not a single prime provider reached this success rate, and with all of them technically being counted as failures according to the ITT, it will be interesting to see what happens next.
This ‘big stick’ may also refer to the implementation of a shifting market share, where providers who perform better with certain referral groups (such as JSA 25+ or ESA claimants) will receive more new referrals in their Contract Package Area (CPA). This will act as a punitive measure for some, reducing the number of referrals to providers that are performing poorly. With relative silence outside of industry circles on the topic, it might have seemed as if the concept had been quietly dropped. It was therefore interesting to hear Hoban say that it would be implemented, two years after the start of the programme (June 2011), which disagrees with the ITT’s date of March 2013. This might be the Minister misspeaking, or it might suggest that the date has been pushed back to allow providers more time to improve performance.
Lastly, Hoban replied to a question regarding the role of the third sector in the Work Programme by saying that organisations need to think about how they fit into its structure. With so many charities so concerned with contract failure, Hoban may be right to imply that, for some in the voluntary sector, the Work Programme is not a viable financial model. Where this leaves these organisations is another matter, and it’s a situation that the government should be preparing for.