NDDP funding structure
62. There are currently 60 job brokers
delivering NDDP. Job brokers are paid on a job outcomes basis
with a further focus on sustained employment. Contractors receive
a small payment (£100) for each client registered, a payment
of up to 50 per cent of the total amount payable when the client
starts work and the remaining total if the client remains in work
for more than six months. The latter two payments can be up to
several thousand pounds.
63. There is strong criticism, particularly
from the voluntary sector organisations who are delivering NDDP,
that the funding mechanism for NDDP contractors is flawed and
potentially damaging to the contracted organisations as it places
a significant amount of financial risk onto providers. Organisations
such as Scope, Papworth Trust and the Shaw Trust argue that the
payment structure has placed a large financial burden on contractors.
As Mr Hawkins of Scope said, "The provider of service
is taking a very large risk, simply because of the nature of the
funding. You get very little for meeting people, working out what
they want, and trying to provide that support; you get approximately
half of your money when they get a job, and you get the other
half when they still have that job six months later, which can
be problematical. So you are taking all the risk, doing all of
the work, and if it does not, for the best of reasons, work out,
you have no money." This results in providers excluding
disabled people with more challenging support needs in order to
keep down costs and reduce the risk of the person not finding
work. Alternatively, providers provide the additional support
at their own cost.
64. NDDP is criticised for predominantly helping
those who are closest to the labour market. Ms Simkiss of the
RNIB said "I think this raises the issue again of how
we can support the people who need the most intensive help. They
are going to cost more money, and at the moment NDDP does not
really meet their needs because it is so output-focussed in terms
of funding."
65. Papworth Trust also criticises the
funding structure for reducing the payment by 50 per cent when
people enter part-time work. They point out that those entering
part-time work still require the same level of support and that
part-time work may actually be more viable for disabled people
moving into work. This highlights the point that, for many disabled
people, a move into part-time work may be as far as they get along
the work continuum. Papworth Trust therefore suggests increasing
the payment for entering part-time work to 75 per cent.[50]
66. The Committee recommends three
changes to the funding structure of NDDP. First, the initial payment
at registration of clients should be increased from £100
to £500 in acknowledgement of the costs of work preparation.
Second, the funding structure which penalises contractors when
clients move into part-time rather than full-time work should
be reformed to recognise that finding, and retaining, part-time
work is a big achievement for many disabled people, which involves
just as great an amount of resourcing by the broker as moving
them into full-time work. Third, we believe Jobcentre Plus offices
should have a discretionary budget to provide rehabilitation services
for claimants who have been on incapacity-related benefits, or
economically inactive through illness or disability but not claiming
benefits. This would not be funded according to job outcomes.
We recommend that this approach be piloted in the areas of
the country with high Incapacity Benefit levels, in particular
those which suffered economic dislocation from the closure of
mining and shipbuilding businesses, as highlighted in paragraphs
20 and 21.
Private and voluntary sector involvement
67. Written and oral evidence generally agreed that
employment projects should be focussed on individual needs. However,
there is still a need for more specialised support from disability-specific
organisations, particularly those in the voluntary sector.
68. The Committee heard evidence from some organisations
calling for the separation of benefits administration from employment
initiatives essentially reverting back to the preJobcentre
Plus model. The Shaw Trust believed that it is offputting
for disabled people to talk about benefits in the same environment
as employment. Having listened to their arguments, the Committee
believes that the Jobcentre Plus model is the most effective administrative
format and that any separation would be a step backwards.
43 Department for Work and Pensions, Pathways to
Work: Helping people into employment, CM 5690, November 2002,
page 21 Back
44
HC Deb, 9 December 2002, col 140w Back
45
Julia Loumidis et al (2001)Evaluation of the New Deal
for Disabled People Personal Adviser Service Pilot, DWP Research
Report No 144, Leeds: CDS Back
46
Ev 114, paras 8.4 - 8.6 Back
47
Q 114 Back
48
Julia Loumidis et al (2001) op cit Back
49
Appendix 33 Back
50
Appendix 32, para 4.6 Back
