Engaging the social sector better to deliver better social outcomes

29th September 2015

In recent years, there has been a growing practise of the outsourcing of public service delivery within the UK, primarily within the welfare to work sector, with the overall aim of securing increased efficiencies for the taxpayer.

‘Engaging the social sector better to deliver better social outcomes’ notes how the effects of recent reforms such as new models, funding methods and an ever changing market environment have shaken the voluntary sector’s role within employment support. The voluntary sector has traditionally been at the forefront of employment support provision; however Duxbury and Heffernan describe how recent trends indicate an increasing number of international companies breaking into the UK market.

From a political perspective, this shift in the welfare to work landscape is a welcome one, with competition driving down prices and delivering effective and efficient results. Whilst these are welcome results, there are also large difficulties posed by the current developments, as summarised by the report:

• The ‘payment-by-result’ models mean that the hard economic reality is that it’s sometimes considered better not to provide support to someone if they are assesed as unlikely to achieve a positive employment outcome.
• A drop in referral volumes, whilst good for jobseekers and the taxpayer, mitigate against spending time and money addressing the complex needs of the least bankable clients.
• A ‘black box’ approach to commissing makes it difficult at bidding for staf to assess the merits of one approach over another, meaning contracts are awarded on evidence of previous results and levels of risk assurance rather than creative new ways of addressing old problems.
• With little to distinguish bidders in term of quality, price scores become the deciding factor in who wins contracts, resulting in less flexibility to spend time and money on ‘uneconomic’ caseloads.
• The challenge of having small, overstretched organisations compete with well capatilsed, global businesses.

These changes have worried charities as they fear this ‘creeping culture change’ will reshape the face and capabilities of their organisations, with the pay-for-result methods making it unaffordable for them to continue to offer their current range of services and support to all individuals. Many charities are continuing to provide services and support outside of government provision, to help those let down by the government system, stretching their limited resources even further. Some fear the eventual withdrawal of charities from the sector, harmfully wasting their knowledge and expertise from future policy development and practise.

To address the challenges discussed, Duxbury and Heffernan suggest a series of policy changes, which will continue to provide efficiency within welfare to work provision whilst ensuring that the quality and effectiveness of the service is not sacrificed, which echo the recommendations Inclusion gave in our response to the Select Committee Inquiry into Welfare to Work:

• Commissioning should consider designing separate programmes or more clearly delineated service and funding models to ensure income and resources are ringfenced to support the most vulnerable.
• A more robust, personalised front-end assessment of need will be vital in understanding the nature of provision required.
• Local authorities and other public bodies will need to be better engaged and incentivised to pool shrinking budgets and dwindling resources – with the rewards of success being reinvested in local services.
• Emphasis on price competition – at least for some elemnets of provision – should be reduced to avoid a race to the bottom with providers rewarded for moving people closer to employment as well as into work.
• Payment systems should positively reward providers for avoiding sanctions so that more charities see employment support initiatives as part of the solution for their beneficaries rather than part of the problem.
• In order to build trust with the public, a commitment to transparency and open-book accounting should become a key factor in determining who delivers public services.

Duxbury and Heffernan state the next key step to addressing the current issues is the launch of a test programme, which will put the recommendations into practise by offering a range of redesigned services for individuals, whose needs are not being met by the current system, provided by a network of delivery partners including charities and local authorities.