DWP Consultation on Commissioning Services – initial thoughts

I am currently writing our submission to the DWPs major consultation on Commissioning. Having been through three major rounds of commissioning –  FND1, FND2 and the Work Programme – I feel that I do have something to say about the process. Here are my thoughts to date.

Commissioning and delivery
There needs to be a better connect between commissioning and delivery. The received wisdom on Work Programme is that Commissioners talked about quality and diversity, but bought on price. This leads to a cynical approach to bidding.  For smaller and third sector organisations this meant that they were often put in as Bid Candy” – a way of boosting the bid. But not used in delivery. To add insult,  Government Ministers who had lauded the sectors involvement did nothing about it.

Incentives
My view is that there needs to be more transparency. If the Government is buying outcomes at the cheapest price it should say so. But, if the DWP  wants a diverse supply chain,  it should reward and incentivise a diverse supply chain

The Black box and payment by results
DWP says “Well designed outcome-based payment models have the potential to drive performance by providing a direct link between outcome delivery and provider finances, rewarding effective support for claimants.”

The current system is not well designed for those furthest from the labour market. And the potential has been lost for this round of contracts. Primes and large subs come and go – but specialist needs will remain. Often these needs are best met by local or specialists organisations, whose main focus is not W2W but who do help people become work ready. With people a long way from the market, and no financial support for   progression, there is little incentive to pay for services that do not lead to direct results. A measure in the system for “progress” would enable organisations to deliver better support to those furthest from the labour market.

The failure of Spot Purchasing
Spot purchasing has not delivered for claimants or the smaller organisations. DWP says “We need to ensure each claimant expects and receives a quality, effective package of support which is able to meet their needs. But saying “we spot purchase” and then devolving purchasing decisions to Adviser Level means far fewer interventions than are required.  There has been much focus on the Black Box approach. But a Black Box can be an empty box.

Use of Public Money
Saving money by only paying for job outcomes is defined as success. But if someone fails to get a job the fact the Government does not pay for it is just a different type of failure.

DWP is spending public money. Where is the accountability in the system beyond a payment. DWP define best value “a trade-off between price and performance that provides the greatest overall benefit under the specified selection criteria.” Who is involved in defining that trade off?

The Code of Conduct
Tendering processes are important for the development of contacts that lead to contracts. Once contracts are in place they can become locked and it is difficult for new organisations to come on board.

Much of the 2008 Code of Conduct in respect of smaller specialist organisations is woolly eg:

  • “have respect for their partners (actual and potential), including the use of fair contracting and funding arrangements”;
  • “The development of smaller providers will be supported and encouraged.”
  • “The top-tier provider should provide a reasonable level of extra support for new entrants into the market.”

Phrases such as these should be replaced by a commissioning process that is transparent as to what the commissioners expect, how the Primes should respond and the penalty that will be imposed if they don’t.

Professionalising the staff 
Organisations like the IEP (Institute of Employability Professionals) have a real role in developing the expertise of the W2W sector.  Commissioning can help by making it count in both bidding and delivery.

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