Select Committee on Work and Pensions Written Evidence

Supplementary memorandum submitted by Reed in Partnership after the publication of the Welfare Reform Green Paper

  Reed in Partnership welcomes the opportunity to provide further evidence to the committee following the publication of the Welfare Reform green paper.

  In our original submission we highlighted a number of points that we believe are important and explained our rationale for this view in far greater detail.

  The points highlighted were:

    —    Pathways to Work remains unproven as a best value solution for assisting the flow of new IB recipients back into employment.

    —    The Pathways to Work approach could be part of a package of solutions capable of assisting IB clients from within the stock of longer term IB recipients.

    —    There is no "benefit" to being incapacitated and we welcome any approach that changes the name of the allowance to something that focuses recipients upon getting better and back to work. We believe that greater numbers have the potential to fulfil productive lives than either the current system or indeed potentially the future system anticipates.

    —    The independent sector (both private and voluntary) has not been sufficiently engaged in the pilots resulting in inadequate testing of best value and innovation relative to assisting the client group.

    —    Given current financial limitations we do not believe that Pathways to Work should be rolled out nationally; and that a Pathways focused on sections of the stock of IB clients should remain focused on the 30 Districts with the highest levels of IB claimant.

    —    Solutions based around the Action Team model can deliver significant outcomes for IB clients at a cost significantly lower than the Pathways to Work model.

  At this moment in time the points made and our rationale for making them remain valid. However the green paper sets out a number of recommendations that if fulfilled will address a number of the points we raised. Equally, however, the method in which they are implemented could potentially have a negative effect on the type of service provided to potential Pathways to Work clients.

  In this further evidence we wish to draw attention to a number of points that we believe require close scrutiny moving forward if the reforms are to prove effective.

  We should stress, however, that in broad terms we welcome much of the content within the green paper and in particular the government's desire to achieve an employment rate equivalent to 80% through:

    —    Reducing by one million the number on incapacity benefits;

    —    Helping 300,000 lone parents into work; and

    —    Increasing by one million the number of older workers.

  As per our original submission we remain convinced that Pathways to Work, in its current format, remains unproven as a best value solution for assisting the flow of new IB recipients back into employment. However we also remain convinced that the approach, particularly that relating to Condition Management Programmes, would ensure that within the stock of IB claimants those who have been on the benefit for over two years do not end up in a position where they are more likely to die or retire than find a new job, as is currently the case highlighted within the green paper.

  We are delighted that the green paper affirms our view that the name Incapacity Benefit should be changed and we applaud the decision to introduce the new Employment and Support Allowance.

  The green paper highlights a number of points that reinforce our view that the private and voluntary sectors should be far more involved in the delivery of best value, innovative solutions that will meet the needs of potential Pathways to Work clients.

  In particular we welcome the points within the green paper that indicate.

    —    "Future Pathways to Work provision will be delivered primarily by the private and voluntary sector with payment on results."

    —    "At the same time, we have brought in private and voluntary sector providers. In Employment Zones, providers are paid not according to what they do, but according to what they achieve. By giving them greater freedom, they have improved performance—independent evaluation shows that they achieve significantly better job outcomes than Jobcentre Plus does with comparable clients."

    —    "In the next stage of reform we will need to engage private and voluntary sector providers. We will invite bids for outcome-based contracts as we roll out Pathways to Work nationally."

  In our original submission we indicated that given current financial limitations we do not believe that Pathways to Work should be rolled out nationally; and that a Pathways focused on sections of the stock of IB clients should remain focused on the 30 Districts with the highest levels of IB claimant.

  Although the green paper highlights numbers on Incapacity Benefit as a national problem and emphasising that there are at least 150,000 claimants in every region, and more in the South East then the North East, it does not emphasise these numbers as a proportion of the overall working age population, which would highlight a far greater problem proportionally in the North East.

  Our concern about a national roll out was based on any proposals for such a roll out being based on delivering exactly to the specifications developed within the initial pilots, and if this was to remain the case we would still be opposed to a national roll out. If the programme was to be rolled out on that basis then we are clear that private and voluntary sector providers could deliver more cost effective outcomes for IB claimants from within an Action Team or other area based outreach approach than would be the case from a Pathways to Work proposition.

  If it is the case that any roll out will be genuinely outcome based and that it adopts the same approach to greater freedom as has been the case within Employment Zones then a national roll out would be welcomed by us.

  However, if any procurement process attempts to tie potential providers to the processes and activities used within the pilot then we would be concerned that creativity, enhanced performance and value for money would be compromised.

  As a leading provider of Employment Zones and Action Teams across the UK we welcome the recognition that our and others' programmes have received within the green paper.

  In addition to the point highlighted above relative to Employment Zones we note that the green paper also emphasises the Action Team approach.

    —    "Twenty-four Action Team for Jobs have helped jobless people in the most employment—deprived areas of the country find and remain in work. They work on an outreach basis and have flexibility to provide whatever support is thought necessary to help people move into work; for example, they might provide debt counselling, work clothes, or help with childcare costs."

  We are emphasising these points to stress the importance of a flexible outcome based approach to meet the needs of current Incapacity Benefit, and other benefit claimants as we work towards achieving the 80% employment rate.

  In our view there are two other key points that have to be managed carefully if we are to ensure the success of the reforms:

  Firstly, the green paper notes that "voluntary and private sector organisations, with their distinctive understanding of the social and economic environment in a local area, will be key contributors to making a success of this initiative".

  Whilst we agree that both voluntary and private sector providers both work closely with other organisations to maximise the synergies for their clients and in most cases, particularly amongst the private sector providers, have a good knowledge of the needs of employers within a local area. We would be concerned if the implementation of the reforms prevented the entry of new providers into a geographical area. Knowledge of the local area whilst important in delivering a good service for clients is not the fundamental building block. Potential service participants in Glasgow are likely to have the same barriers to employment as those in Liverpool and the ability of organisations to address the issues experienced by individuals and ultimately match them to potential employers are the key factors in delivering successful outcomes. Reed in Partnership has in a number of locations across the UK taken over failing provision from local providers in an area where we have had no previous presence and turned the programmes around in very short timescales by our focus on the needs of the individual and employers. Whoever is responsible for building the partnerships suggested in the green paper and for the procurement of solutions must therefore, in our view, ensure that the services are being delivered by the best possible provider not simply the providers who currently operate in a particular locality.

  Secondly we note that the green paper puts great emphasis on the role of Cities, and that "the resources flowing into cities would have more impact if we could get local agencies working together more closely" and that the paper goes on to outline an approach involving local consortiums who would "be expected to make use of private and voluntary sector providers to deliver additional employment support".

  We applaud the efforts to maximise synergies at this level, however wish to note a word of caution about who the decision makers are in this process. We would be concerned if political influence at the local level resulted in little or no attempts being made to engage with the private sector or if local influencers were able to make decisions on who was awarded the contracts based on their existing relationships within a City. We are keen that in the development of these proposals guidance is provided to consortium on the minimum level of delivery that must be assigned to the private and voluntary sectors and that a clear and transparent process of procurement and evaluation remains at the heart of process.

  With these simple steps addressed we are confident that the changes proposed will not result in best practise experience being lost to potential clients and that the reforms will lead to a successful result for individuals and the UK economy.

  As indicated within our original submission, if we can further assist the Committee with their inquiry we would welcome the opportunity to give oral evidence.

Chris Melvin

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