7th June 2010

I attended a “meet the ministers” event in London for New Deal suppliers on 2 June 2010. The event was hosted by DWP with Chris Grayling and Lord Freud. In general the message was that there will be rapid changes and they want to build on the best but free providers to get on with the job. In the new scheme the government is looking to transform welfare to work and any new system will be providers paid on results – not for “inputs”. It is likely that there will be a single scheme instead of the myriad of special programmes currently seen and the volumes going through are likely to be much higher as claimants are moved from IB onto JSA.

The message was clear that this is not a rebranding but a radical transformation. The government is clear that intensive provision is not a role for government and should be provided by the private/third sector. It is likely that clients will come with different amounts attached to their heads with the “hardest to help” coming with the most money. Providers will then be free to deliver whatever is required to get these people into work. This could include confidence building etc along with direct work related activities. The government is clear that the idea is to get people into work and not a job i.e. as long as they are off the register that is fine and for instance they could become a temp moving from role to role rather than staying in one job. Providers will be paid on sustainable work so the claimant would have to be off the register for an agreed period e.g. 2/3 years.

This system means that providers need a strong capital base as payments could be 12 months+ down the line. By strong capital base the indication was “needing city help” i.e. £100m+. Companies will need scale and “rich” coalitions are encouraged with multiple disciplines aligned with good management, innovation and creativity. Changes will be made in days and weeks not months and we can expect to receive individual communication soon regarding what is happening to current provision and expect more details in 4-6 weeks on the new programme.

In answer to some questions:

– Is FND2 dropped? No decision today but preparation work will not be wasted

– What will be the geographical contracting areas? Not yet decided but hints as to FND1&2 areas. Not looking to shake up unnecessarily

– What is the role of the 3rd sector? Want to see 3rd sector involved at highest levels but capital may be a problem

– Will the risk be put down to the smaller players? It is the job of the prime contractor to fund the contract!!!

– What happens re the benefit trap? Claimants will be better off working with hints that 55% taper rate on benefits e.g. claimants will keep 55p of every £ earned.

– Is the government still committed to Work for Yourself? Yes!

All “good stuff” so far then and little to argue with. However as with any government programme the devil is in the detail and I do have some queries, concerns and questions which need to be answered. In particular:

– Safeguards that the small and medium sized members of the coalition will not be squeezed by the prime contractor – the “Tesco effect” – risk needs to be equally shared and not passed down to the end deliverer

– A maximum amount that prime contractors can “cream” from the contract

– Where contractors do not deliver then they cannot simply bid and win another contract without previous performance taken into account

– Weighting given to consortia including the third sector

– Work for Yourself kept as a separate contract as it is not about employment and needs a specialist approach

– Clarity over contract areas – not too big or local provision disappears and a lowest common denominator approach prevails

So we can all look forward to more detail coming soon and I am sure that we can expect some radical changes – I certainly hope so!

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