Flexible New Deal


M

mart2306

http://www.guardian.co.uk/society/joepublic/2009/jun/03/charities-welfare-to-work

Charities lose again on welfare to workComments (1)
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Two unemployed young men wait for a friend outside the Jobcentre
offices in Doncaster. Photograph: Christopher Thomond/Christopher
Thomond

At the first real opportunity it has had to let charities prove they
can get us out of this recession, the government flunks it by awarding
to private companies the bulk of its programme to get long-term
unemployed people back into work. Sheffield-based firm A4e won the
contract to run the flexible new deal (FND) in five areas of England,
and Serco, the FTSE 100-listed public services provider, got four
contracts, including much of Wales. Two overseas newcomers, Dutch-
based Calder Holdings and US/Dutch Mentor Employment & Skills, were
also on last week's preferred bidder list. The Glasgow-based Wise
Group, a social enterprise, did win the contract for Scotland, yet
many voluntary organisations lost out, despite outperforming the
private sector in delivery of programmes - such as Pathways to Work -
that are the precursor to the FND, which begins in October.

The biggest surprise, however, is not the third sector's poor show but
how many private sector companies competed for the contracts, given
that less than a year ago potential bidders were warning that to meet
the government's target of getting 69% of clients into work they would
not receive anywhere near enough money per client to provide what was
needed - such as high-calibre personal advisers, one-to-one meetings,
and sub-contracting to local agencies with the specialist skills to
help with, say, drug and alcohol problems. So what changed?

Most significantly, the government has poured more than three times as
much money into its flagship welfare to work programme than originally
intended. It is no longer a £2bn five-year programme expected to help
more than 200,000 long-term unemployed people into jobs. It is now
expected that triple the amount of jobseekers will access the service,
after 12 months without work, at a cost to the taxpayer of £7bn over
its lifetime - a figure that a government looking to put a squeeze on
public spending has, unsurprisingly, not been keen to publicise.

The other notable change is that the government appears to have caved
in to pressure from welfare-to-work companies and partially
backtracked on its proposed payment-by-results. Preferred bidders can
now expect a whopping 40% of the funding months before they find a
single person a job.

The unit costs will, however, remain the same, so there are still
justifiable fears that some providers will write off clients who
require intensive, tailored and expensive support, and will cherry-
pick clients who cost less to get into work. A report from the Social
Market Foundation thinktank last year warned that paying providers the
same amount of money for each person they find a job, regardless of
their needs, will lead to firms "parking" the most needy jobseekers
because they are the most costly.

Serco has gone some way to addressing the low unit costs by suggesting
to the Department for Work and Pensions (DWP) that it can get 40%-45%
into work in the present economic client, rather than meeting the 65%
target. And guess what? The DWP brought it. "We went in with a very
realistic offer," says Richard Johnson, managing director of welfare
to work at Serco.

Serco says that under its model, developed with the Association of
Chief Executives of Voluntary Organisations (Acevo), it will sub-
contract all its services to local voluntary and public sector
organisations, such as a Kashmir youth group and The Prince's Trust in
Manchester.

Its close relationship with Serco perhaps explains Acevo's rather
sheepish response to the preferred bidder list. Instead of expressing
outrage that so many of its members lost out or even had to withdraw
from the uneven contest - having neither the cash flow nor the
economics of scale to compete - it said it would be working closely
with the DWP to ensure charities could play a major role as sub-
contractors.

• Alison Benjamin is editor of SocietyGuardian
 
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N

Niteawk

http://www.guardian.co.uk/society/joepublic/2009/jun/03/charities-welfare-to-work

Charities lose again on welfare to workComments (1)
Buzz up!
Digg it

Two unemployed young men wait for a friend outside the Jobcentre
offices in Doncaster. Photograph: Christopher Thomond/Christopher
Thomond

At the first real opportunity it has had to let charities prove they
can get us out of this recession, the government flunks it by awarding
to private companies the bulk of its programme to get long-term
unemployed people back into work. Sheffield-based firm A4e won the
contract to run the flexible new deal (FND) in five areas of England,
and Serco, the FTSE 100-listed public services provider, got four
contracts, including much of Wales. Two overseas newcomers, Dutch-
based Calder Holdings and US/Dutch Mentor Employment & Skills, were
also on last week's preferred bidder list. The Glasgow-based Wise
Group, a social enterprise, did win the contract for Scotland, yet
many voluntary organisations lost out, despite outperforming the
private sector in delivery of programmes - such as Pathways to Work -
that are the precursor to the FND, which begins in October.

The biggest surprise, however, is not the third sector's poor show but
how many private sector companies competed for the contracts, given
that less than a year ago potential bidders were warning that to meet
the government's target of getting 69% of clients into work they would
not receive anywhere near enough money per client to provide what was
needed - such as high-calibre personal advisers, one-to-one meetings,
and sub-contracting to local agencies with the specialist skills to
help with, say, drug and alcohol problems. So what changed?

Most significantly, the government has poured more than three times as
much money into its flagship welfare to work programme than originally
intended. It is no longer a £2bn five-year programme expected to help
more than 200,000 long-term unemployed people into jobs. It is now
expected that triple the amount of jobseekers will access the service,
after 12 months without work, at a cost to the taxpayer of £7bn over
its lifetime - a figure that a government looking to put a squeeze on
public spending has, unsurprisingly, not been keen to publicise.

The other notable change is that the government appears to have caved
in to pressure from welfare-to-work companies and partially
backtracked on its proposed payment-by-results. Preferred bidders can
now expect a whopping 40% of the funding months before they find a
single person a job.

The unit costs will, however, remain the same, so there are still
justifiable fears that some providers will write off clients who
require intensive, tailored and expensive support, and will cherry-
pick clients who cost less to get into work. A report from the Social
Market Foundation thinktank last year warned that paying providers the
same amount of money for each person they find a job, regardless of
their needs, will lead to firms "parking" the most needy jobseekers
because they are the most costly.

Serco has gone some way to addressing the low unit costs by suggesting
to the Department for Work and Pensions (DWP) that it can get 40%-45%
into work in the present economic client, rather than meeting the 65%
target. And guess what? The DWP brought it. "We went in with a very
realistic offer," says Richard Johnson, managing director of welfare
to work at Serco.

Serco says that under its model, developed with the Association of
Chief Executives of Voluntary Organisations (Acevo), it will sub-
contract all its services to local voluntary and public sector
organisations, such as a Kashmir youth group and The Prince's Trust in
Manchester.

Its close relationship with Serco perhaps explains Acevo's rather
sheepish response to the preferred bidder list. Instead of expressing
outrage that so many of its members lost out or even had to withdraw
from the uneven contest - having neither the cash flow nor the
economics of scale to compete - it said it would be working closely
with the DWP to ensure charities could play a major role as sub-
contractors.

• Alison Benjamin is editor of SocietyGuardian


The government is basically paying private contractors billions for nothing.
The type of courses the unemployed will get amount to no more than job
search which they do anyway, and a CV which any normal person is capable of
writing themselves. The courses will be mandatory to make sure that the
companies involved have a steady flow of income. In effect the public are
paying several times over for the same service that the Jobcentre provides
as a matter of course.
 

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