http://www.plazapublishing.co.uk/dwpproposes.html

DWP proposes payment by sustainable results

Tania Mason

Charities and private sector organisations who take on government
contracts to get unemployed people into work, will be paid according
to how long their clients stay in jobs, the Department for Work and
Pensions has proposed.

In the first draft of its new report on commissioning strategy, the
DWP said that the emphasis in the £1bn welfare-to-work market will no
longer be just on getting people into work, but on making sure they
stay there. This will be achieved, it said, through larger and longer
contracts, a smaller number of lead providers, and "greater focus on
results-based payments".

Better accountability will be ensured through the detailing of several
points at which contracts can be terminated or adjusted if performance
is poor.

Ian Charlesworth, chief executive of the Shaw Trust (pictured), said
he was pleased to see the new focus on people staying in jobs,
pointing out that 75 per cent of the clients found jobs by the Shaw
Trust under the New Deal for the Disabled scheme, stay for at least
six months.

He also welcomed payment by results, but felt the DWP needed to take
more decisive action against those that are found to be performing
poorly. He said DWP had taken no action against the organisations
providing the Workstep scheme despite its performance being "blasted"
by the National Audit Office three years ago.

Overall, he said, the report showed the Department recognised that
changes were needed, but what remained to be seen was whether the
consultation which is to follow will be a proper consultation that
takes account of the views of all stakeholders, and "not just a PR
exercise".

And, he said, DWP's stance on TUPE regulations needed clarifying.
"They need to go much further in stating whether TUPE applies or not,
as is the practice in many local authorities."

Acevo's director of strategy and enterprise Dr Peter Kyle welcomed the
general direction of the report, and said he was pleased to see the
department acting on some of the conclusions of the recent McDonald
inquiry into the awarding of Pathways to Work contracts, "most notably
with regards to a code of conduct for subcontracting and a clearer
lead on application of TUPE to transfers between third-party
providers".

However, he added that it failed to spell out how a procurement
process based on larger-scale, lower-cost contracts could result in
the "key role" for the third sector that DWP claims it wants.