Service delivery:
Employment services

Support for all in the UK Work Programme?
Differential payments, same old problem…

Working Paper 115 - December 2013

The UK has been a high profile policy innovator in welfare-to-work provision that has led in the Coalition government's Work Programme to a fully outsourced, ‘black box’ model with payments based overwhelmingly on job outcome results. A perennial fear in such programmes is providers’ incentives to ‘cream’ and ‘park’ claimants and the Department for Work and Pensions (DWP) have sought to mitigate such provider behaviours through Work Programme design, particularly via the use of claimant groups and differential pricing.

In this paper we draw on a qualitative study of providers in the programme, alongside quantitative analysis of published performance data to explore evidence around creaming and parking. The combination of the quantitative and qualitative evidence suggests that creaming and parking are widespread and systematically embedded within the Work Programme and we argue that they are driven by a combination of intense cost-pressures and extremely ambitious performance targets, alongside overly diverse claimant groups and inadequately calibrated differentiated payment levels.

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Does sector matter? Understanding the experiences
of providers in the Work Programme

Working Paper 92 - February 2013 

The Work Programme was lauded by the Employment Minister as a ‘triumph’ for the Big Society because of the widespread involvement of the third sector in its delivery. Yet concerns about the sector’s role and its perceived marginalisation in such large-scale high-risk contracts have dogged the Programme. This paper explores the experiences of different providers in the Work Programme, asking what, if anything, is distinctive about the experiences of third sector organisations (TSOs). It draws on interviews with key informants and subcontractors from all sectors to explore issues around the squeezing out of third sector organisations, low flows of clients to subcontractors and the ‘creaming and parking’ of hard to help customers.

Key findings

  • Sector is not the most important factor in accounting for providers’ experiences of the Work Programme. Organisational size, supply chain position, the strategy and management practice of their Prime contractor and location all shape the role subcontractors play.
  • Position in the supply chain is key. Tier 1 end to end provision generally offers greater contractual certainty over client flows and higher numbers of referrals. Many tier 2 specialist subcontractors have received no or only very small numbers of referrals.
  • The lack of referrals to tier 2 subcontractors appears to be a function of an under resourced programme, as well as doubts that as many clients in the health related benefit groups are entering the Programme as expected.
  • It also implies that customers with specific needs may be being ‘parked’.
  • Gaming – including creaming and parking – appears to be embedded in the Work Programme. Many providers saw it as a rational response to Payment by Results (PbR).
  • The financial stresses that the Programme is under creates doubt about the quality of services being delivered, particularly to those furthest from the labour market.

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The third sector delivering employment services: evidence review

Working paper 70 - January 2012

TSRC has been conducting ongoing research into the third sector’s involvement in the provision of employment services. Our initial evidence review collated evidence about the sector's experiences and explored the main areas of controversy. The review found that the Work Programme can be seen as a major acceleration of the previous government’s policy model. This model is based upon a small number of large government contracts, greater flexibility for providers and payment contingent on results.

It highlighted fears that the third sector is being squeezed out of employment services provision, reports of unfair relationships between third sector subcontractors and prime providers, and concerns that the hardest to help individuals are not sufficiently provided for by current policy.

The review questions whether the programme’s framework will allow TSOs to fulfil their potential in this area. It also highlights the need to know more about third sector delivery of employment services, in particular what organisations are involved and what value they provide.

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