There are one or two stories from last week that I've neglected to pick up on due to my attention of necessity being focused upon the MoJ consultation exercise. In particular the Work Programme came under yet more critical scrutiny as the results of further research came to light on what effect the now infamous Payment by Results system was having.
The research was carried out by the University of Birmingham Third Sector Research Centre and gave yet more confirmation of what actually goes on under PbR:-
The study notes that ‘gaming’ – including creaming off those who are closest to the labour market, and ‘parking’ those who are hardest to help – is endemic within the programme. The research points to the overall lack of resource in the Programme and its structure and payment mechanisms, as the main reasons for this. Many providers in the study saw parking hard to help clients as a ‘rational response to payment by results’.
As this article from the Guardian graphically makes clear, the whole thing has been an utter disaster for many small third sector organisations:-
The study cites a small private-sector provider which complained that big corporate providers, known as "primes", would keep "job-ready" customers for themselves while passing on more difficult cases to subcontractors. "It's not being PC but I'll just say it as it is … you tend to get left with the rubbish; people who aren't going to get a job … If the [prime] thought they could get them a job, they wouldn't [refer them to] someone else to get a job."
The design of the system meant that providers offering specialist services targeted niche groups, such as homeless people and ex-offenders. The suggestion is that the people in this category are regarded as such a risk that the primes simply "park" their cases and do not pass them down the chain at all. So charities providing specialist services for these candidates are often getting no referrals, putting them under financial pressure. One private sector interviewee described the market for customised interventions as "a washout": "Certainly for third sector providers that have a specialist niche, it's a killing zone."
All this behaviour by the 'primes' was utterly predictable of course and Richard Johnson writing in the Guardian should know because he used to run the Serco and Ingeus Welfare to Work contractors:-
This was evident from the outset, as soon as the Department for Work and Pensions (DWP) initiated the tendering process. Welfare-to-work companies either offered DWP untenable terms, and won, or went out of business. The organisations which offered no (or limited) discounts in the price competition of the tenders were those with substantial business elsewhere, notably G4S and Serco. Those who won the most contracts offered to do it cheapest.
Though the scant data that the DWP allows into the public domain two years on clearly indicate that overall performance is poor, and those who are the least job-ready are being ignored, the primes continue to call it all a big success.
Not surprisingly, this disaster has attracted the attention of Margaret Hodge and the Public Accounts Committee. Their report discussed here in another Guardian piece is about as damning as it is possible to imagine and raises the spectre of another Olympic security fiasco should one of the 'primes' fail:-