Memorandum submitted by the City Strategy
Pathfinders Learning Network (EP 08)
To support the sharing of ideas and good practice
between the Pathfinders, a Learning Network was established by
DWP. Rocket Science currently manages the Network and drafted
this submission on behalf of Pathfinders in close consultation
with them. It reflects their knowledge and experience of DWP contract
management and procurement arrangements.
INQUIRY INTO
THE MANAGEMENT
AND ADMINISTRATION
OF CONTRACTED
EMPLOYMENT PROGRAMMES
1. The City Strategy Pathfinders (CSPs)
programme aims to tackle worklessness in the most disadvantaged
communities across the UK. The 15 pathfinder areas include
many that are furthest from the Government's original aim of 80%
employment, most of which are in the UK's major cities and urban
areas.
2. The Pathfinder pilot is based on the
idea that local partners can deliver more if they combine and
align their efforts behind shared priorities, and are given more
freedom to try out new ideas and to tailor services in response
to local need. The Pathfinders will test how best to combine the
work of government agencies, local government and the private
and voluntary sectors in a concerted local partnership (consortium)—to
provide the support jobless people need to find and progress in
work. They aim to:
— Ensure provision is more attuned to the
needs of local employers; and
— Ensure those most disadvantaged in the
labour market can receive the help and guidance they need.
3. To support the sharing of ideas and good
practice and facilitate communication between the pathfinders,
DWP established a Learning Network. Rocket Science currently facilitates
and manages the Learning Network. This submission was drafted
by Rocket on behalf of Pathfinders and reflects their knowledge
and experience of DWP contract management and procurement arrangements.
4. In responding to the Committee's call
for evidence, Pathfinders have focused comments on questions five
and seven, pertaining to the impact of centralisation of contract
management and to ensuring transparency, areas where Pathfinders
have the most significant experience.
5. Pathfinders are particularly well embedded
in their localities, with strong relationships across the public,
private and third sector provider and employer base. CSPs have
been charged with bringing greater alignment, coherence and effectiveness
to employment and skills provision in their areas. To do this,
partnerships have been established and developed that include
the key stakeholders relevant to employment and skills—in
particular, local authorities, the Learning and Skills Council,
the employer voice and Jobcentre Plus. As such, they are able
to bring additional insights from a local level to contract management.
Yet to date, Pathfinder experience suggests that both the mechanisms
and the will to fully involve them and bring about local accountability
remain incomplete and have not maximised the potential of the
Pathfinder experiment. Indeed, the Committee report DWP's Commissioning
Strategy and the Flexible New Deal highlighted that there
appears to be, "considerable ambiguity surrounding the role
of local partnerships in the monitoring process".[43]
6. In part this is a consequence of the
increased centralisation of contract management within DWP that
has seen a reduced role for Jobcentre Plus (JCP) district managers.
As JCP is a key partner in the Pathfinders, the shift of contract
management and oversight away from district managers is perceived
to have weakened CSPs' communication link into the performance
management system. And, because major providers tend to look to
their contract managers within DWP, Pathfinders as a whole perceive
that they have less influence and authority with which to fulfil
their role of bringing about greater alignment of provision.
7. The reduced opportunity for Pathfinders
to report back via district managers their collective, grassroots
knowledge about the fine-grained performance of major employment
contracts can impact on, in particular, the customer experience.
Delivery issues on the ground can potentially be overlooked by
contract management processes that are less closely involved in
the local area. David Coyne, of Glasgow Works CSP, summarised
the situation in the Committee's previous report on Flexible New
Deal:
"The role of local partnerships in the management
of the contracts as it goes forward is very unclear. The DWP [...]
indicate that there is a relationship with them in managing things
on an ongoing basis through district management level in Jobcentre
Plus, but even Jobcentre Plus are now distant from the contract
management processes. So having a district manager on a partnership
board, there is no guarantee that there is any influence over
a contractor."[44]
8. Provider engagement meetings (PEM) have
been recently introduced as a mechanism to bring an element of
local accountability, with DWP contract managers and JCP district
managers meeting with major providers to discuss progress and
issues affecting provision. There is scope to include Pathfinders
in this process as well, indeed, some have already been involved.
This is a positive step as Pathfinders have been keen to be closely
involved in management processes and had previously identified
this kind of "one conversation" model as the most effective
for ongoing performance management.
9. However, at present there has been limited
engagement by Pathfinders with the PEMs. As a new mechanism, this
may improve as it beds in over time. Nonetheless, there is some
early evidence to suggest that the PEMs may not, as yet, be operating
in the way intended—as a forum for Pathfinders (and others)
to be informed about monitoring and performance, or to influence
the alignment of contracted provision. It is important that Pathfinders
are able to use this kind of "route to influence" effectively
or there is a risk that the desired improvements to the coherence
of the system as a whole will not happen in the way envisaged
when the Pathfinders were created and the prime contractor regime
introduced.
10. Pathfinders are also concerned to highlight
to the Committee issues around the ability for a wider range of
partners to be actively involved in the full cycle of contract
management. Mechanisms implemented to bring the Pathfinder voice
to procurement processes and institute an element of local accountability
include front-end consultation with CSPs on specifications and
involvement in assessing invitations to tender (ItTs). However,
Pathfinders have identified a number of issues with the implementation
of this approach. These include:
— Lack of notice to comment fully on specifications
and bids.
— Rigid scoring and feedback processes
and proformas that do not allow for local knowledge on performance
to be accurately fed back.
— Insufficient time provided to develop
co-commissioning bids.
— Lack of feedback on how or whether Pathfinder
comments have influenced and reshaped specifications or scoring
outcome of bids.
— Further, a lack of a local dimension
in ItTs requiring contractors to detail how they will engage with
and address local issues.
11. Further, pathfinders hold the view that
contractors should be expected to participate in local planning
structures, as requested by the partnership, and required to be
flexible in the operation of the contract to support local strategies
and align service delivery with local programmes to add value
as directed by local partnerships. Contractors should actively
engage with local partnerships to access partnership support for
there delivery and to provide performance information linked,
where possible, to local data management systems.
12. Pathfinders welcome the opportunity
to bring a local nuance to service specifications. However, these
consultation processes do not currently provide for the level
of involvement with, and influence over, delivery and performance
management in their local areas that Pathfinders aspire to. Crucially,
these consultation processes have not yet led to the Pathfinders
having confidence that their local knowledge is being most effectively
used to ensure that provision is consistently excellent and responds
to local needs.
13. Pathfinders are a time-limited pilot
set up to test new ways of collaborating. Many are in the process
of evolving as the employment and skills element of multi-area
agreements or community planning partnerships, or taking their
collective work forward through other governance arrangements.
Going forward, the establishment of the Provider Engagement Meetings
would need to take account of these structural changes.
14. Pathfinders have also raised issues
around how transparency can be ensured by contract management
within the prime contractor model, particularly as it relates
to sub-contracting. Pathfinders were concerned that, in their
experience, the evidence included in bids about the bidder's partnering
or subcontracting relationships is less closely examined than
it ought to be by DWP, particularly if they wish to be sure that
those relationships are as strong as claimed. For example, Pathfinders
report that they have found themselves characterised as "key
stakeholders" or "delivery partners" in bids after
only very limited contact and superficial relationships with some
potential primes. Further, that when Pathfinders have been asked
to comment on the strength of partnerships in bids, the scoring
system proformas provided to do so work against the CSPs accurately
communicating local information about the true health of the partnership.
15. In terms of maintaining a role for subcontractors,
there is only modest confidence that tools like the "letter
of intent" are sufficient safeguard for subcontracting arrangements.
The development of a coherent and effective supply chain is critical
to ensure that prime contractors deliver value for money and outcomes
for DWP. This is set against managing specialised and localised
provision to ensure that contracts deliver the best service for
the customer. The traditional contracting process has embedded
a culture of competition that undermines the ethos of collaboration
required for the model to be effective. Maintaining a fair and
reasonable role for subcontractors and a healthy supply will require
vigilance and monitoring of the Code of Conduct.
16. Additionally, Pathfinders noted a capacity
issue around smaller, especially third sector, providers and their
ability to engage with the prime contracting agenda. They see
themselves as potentially having an important role as information
conduits, honest brokers and suppliers of (or sign-posters to)
mainstream and specialist capacity building support. Pathfinders
suggested that potential primes could themselves improve transparency
and increase opportunities by hosting information events for potential
subcontractors (especially small and third sector organisations)
and providing information packs that outline the general terms
and conditions a subcontractor could expect.
17. Given the length of the contracts, there
has also been debate about capacity building for smaller providers
over the life of the contract. This kind of activity is not currently
built into the specification. Pathfinders would request that,
during the tender stage, contractors are asked about (and scored
on) their approaches and resources for supply chain development.
Pathfinders believe that this should be reflected in the contract
management process and provide the opportunity to respond, during
delivery, to any lack of proactive effort in reaching out to smaller,
specialist providers.
18. Local intelligence is central to informed
contract management that ensures effective delivery for customers.
Pathfinders have been concerned that the changed role of JCP district
managers has weakened their conduit to contract management processes.
While mechanisms exist to involve Pathfinders and JCP, there is
scope to improve the implementation of these and both increase
the alignment of contracted employment services with local strategies,
as well as bringing local oversight to their management.
19. City Strategy Pathfinders and most Local
Authorities have area-based targets (ie through Local Area Agreement
Targets: NI 152 and NI 153) to narrow the performance gap
in specific geographies. Yet these targets are not reflected in
DWP contracts. This is fine, to an extent, for mandatory programmes
like FND, but for programmes focusing on the inactive like NDLP
and Pathways, and particularly where providers are now allowed
to generate their own referrals (eg through ESF activity) providers
should be set targets for specific geographies. If either local
or national PSA area-based targets are ever to be delivered, then
all parts of the delivery system need to be incentivised to contribute
towards them. This must include DWP contractors as well as JCP
through their JOT points and targets.
20. One of the key issues in relation to
DWP contracts is the number of referrals from JCP. Some pathfinders
have reported low (and quite often inappropriate) referrals for
Programme Centres at a time when on flows to JSA were more than
doubling. This was not an issue with the provider, but with JCP's
interaction with the provider. Despite talking to DWP contract
managers as well as the provider and local JCP District, the issue
was never resolved. It was clear from this experience that the
risk management approach that DWP contract managers take to the
individual provider, as opposed to looking at the performance
of the individual contracts, means that they do not intervene,
or even question, poor performance on some contracts if the provider's
overall performance across the country is within tolerance. This
lack of effective contract management in some areas leads to DWP
money being wasted and people not accessing the support that they
need and that has been bought for them.
21. The approach to commissioning (Level
1, 2 and 3) that DWP have set out is one of the clearest
and most positive moves to come out of central government in relation
to devolution, and Pathfinders feel that this would not have been
so developed without the thinking and support of the City Strategy
Pathfinders.
22. Whilst pathfinders very much welcome
the opportunity to use local resources to expand/enhance DWP contracts
through Level 2 commissioning arrangements, the next step
would be to develop a similar ability to enhance JCP delivery.
This could be through buying extra outreach staff, or to buy extra
staff to allow them to spend more time with customers, particularly
in the current climate where JCP staff resources are stretched.
23. Despite the very positive approach of
the DWP Commissioning Strategy to encouraging providers to make
the most appropriate strategic and delivery links, some pathfinders
can not see that much has changed in relation to the provider
base. DWP, along with the old DIUS department through Work Skills,
have spoken about local partners having a role in relation to
"market stewardship" ie helping to develop a healthy
and responsive provider market. Pathfinders would welcome any
recommendations from the Select Committee about how best this
can be taken forward.
October 2009
43 HoC DWP Select Committee, DWP's Commissioning
Strategy and the Flexible New Deal UK Parliament, 2009, p52 Back
44
Ibid Back
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