Memorandum submitted by Reed in Partnership
(EP 11)
KEY SUMMARY
— Reed in Partnership welcomes the Select
Committee inquiry into the management and administration of contracted
employment programmes. The welfare to work sector has made a significant
investment in ensuring the integrity of the claims system. Many
providers have put in place robust measures to reduce the potential
for fraud which go above the minimum DWP standards. The Select
Committee may wish to look at these models to examine how these
quality controls can be established across the industry.
— The DWP contract management system focuses
very much on ensuring compliance. We believe that there may be
a need for the Department to look more at how it can improve provider
performance and also ensure that the quality of the service being
delivered is of high quality. This could be achieved by a greater
focus on innovation and partnership working across the sector.
— If the Star Ratings are going to be a
way of genuinely measuring provider performance then further work
needs to be undertaken in order to ensure that they genuinely
reflect the outcomes and service being delivered.
— In terms of the centralisation of contract
management, we would argue that there is still a need for greater
clarity about how the more centralised model of contract management
works at the local JCP level. This is more important as contracts
grow and cover numerous JCP districts.
— We welcome the development of a Customer
Charter as a way of ensuring greater clarity about the rights
and responsibilities of people taking part in employment programmes.
ABOUT REED
IN PARTNERSHIP
1. Reed in Partnership was formed in 1998 as
the first private sector provider of New Deal services with an
£8 million contract in London. Since then we have delivered
and managed over 50 DWP/JCP contracts with a combined value
of over £400 million. We now manage large contracts
across London, Yorkshire, Merseyside, Cambridge, Suffolk and Scotland
working with around 100 subcontractors, 2,000 partners
and over 25,000 employers. Over the past 10 years, we
have helped over 200,000 disadvantaged customers with improved
motivation, skills, and jobsearch capacity, with over 94,000 finding
sustained employment.
2. Our business has expanded and diversified
throughout this period with the addition of contracts for Learning
and Skills Councils, Regional Development Agencies and Local Authorities.
Through these contracts we have promoted skills development, provided
support to businesses and managed grant funding. In addition,
we now have operations in Australia and Poland where we are supporting
both new claimants and the long-term unemployed.
SAFEGUARDS WITHIN
THE WELFARE
TO WORK
SECTOR
3. Reed in Partnership welcomes the Select
Committee inquiry into the management and administration of contracted
employment programmes The welfare to work sector has grown significantly
in the past ten years. With this growth has come more developed
systems to prevent fraudulent claims and a growing awareness of
the need for providers to regularly review and ensure that robust
systems are in place.
4. Whilst we would in no way wish to downplay
the recent media reports that have emerged, it is important to
place these stories within the context of the overall industry.
Every day tens of thousands of people receive help and assistance
from private, voluntary and public providers across the UK. The
overwhelming majority of people working within the industry are
dedicated and honest professionals looking to do the best for
their customers. However, there is a need for everyone in the
industry to be aware of the risk of fraud and for all providers
to constantly challenge whether better and more robust systems
could be established.
5. Reed in Partnership recognises that fraud
is a potential risk to the business. We have therefore put in
place a number of central systems to ensure that clear policies
and practices underpin all of our programme delivery. These systems
include: a Risk Management Board; comprehensive policies, ethical
codes and a whistle-blowing process; the development of an ethical
culture across all parts of our business; independent internal
audit and comprehensive financial controls; and a supply chain
management process that integrates subcontractors into this approach.
Case Study: Our recruitment, training and culture
of ethical behaviour are key elements in preventing fraud. Staff
are recruited through a full day assessment process which includes
competency based testing and ethical behaviour assessment.
Our staff undertake Business Ethics training
so they are made aware of the various policies that are in place
and have an understanding of the standards we expect from our
employees. In addition, our business is underpinned by a set of
six core values (Accountability, Honesty, Efficiency, Forward
Thinking, High Performing and Customer Focus) which represent
how our staff approach their work and the decisions they make.
These values are highly visible across our business.
6. The DWP process for ensuring the accuracy
of job outcomes looks very much at whether providers have accurate
paper records in place. With the move towards checking whether
customers have left benefits, the risk of fraud should be reduced.
However, many providers have developed their own systems which
go above and beyond the DWP requirements to ensure the accuracy
of job outcome claims. The DWP may wish to look at whether it
should require increased minimum standards from providers to ensure
greater consistency across providers.
7. Reed in Partnership has very robust measures
to reduce the potential for fraud. This includes the establishment
of an independent Internal Audit team who are completely removed
from the operational side of the business. Our financial control
procedures, subject to regular risk assessment, help to ensure
the validity of outcomes through our five stage evidencing process:
1. The Personal Adviser inputs the outcome on
our Orion MI system and then passes the file to the Quality team.
2. The Quality Manager conducts a full file check
to ensure that the whole file is compliant. The Quality Manager
then authorises the outcome to move to the verification stage.
3. The outcome is transferred electronically
to our Evidence Collection Team who obtain evidence of the employment.
All telephone contact with employers is recorded.
4. Evidence of the outcome is verified by the
Finance team, making it a claimable event.
5. The outcome is then claimed for payment via
our Orion MI system.
8. Within Reed in Partnership, operations
have no control over outcome evidence or influence on performance
claims. These systems have been put in place at a significant
cost to the business to ensure we reduced any potential for fraudulent
activity. There may be a role for ensuring that all providers
have quality systems that are above current DWP minimum standards.
9. Reed in Partnership would argue that
there has to be some trust in the system between the DWP and its
providers. A wholly bureaucratic system for quality checks would
take some of the focus away from the customers themselves. ERSA
has found that providers currently spend 10% of the contract value
on evidencing claims.
10. In considering whether to place more
stringent checks on providers, there is also the real issue about
more onerous controls placing undue bureaucracy on employers.
This could result in the customers on employment programmes being
placed at a disadvantage. The Select Committee may wish to look
at some of the models of best practice and examine how these quality
controls can be established across the industry.
CONTRACT MANAGEMENT
11. The DWP contract management system focuses
very much on ensuring compliance. We believe that there may be
a need for the Department to look more at how it can improve provider
performance and also ensure the quality of the service being delivered
is high quality. For us, this would include greater partnership
working at the local level to drive innovation in terms of the
customer journey and experience.
12. Reed in Partnership is committed to
continuous improvement and is always looking to improve and innovate
on the programmes we deliver. The systems in place are very robust
in terms of driving quality assurance but we would question whether
they truly drive provider performance.
13. There are also some unusual variations
in the way that the Star Ratings operate. For instance, Quality
Key Performance Indicator's make up 20% of the points for Star
Ratings. This score is intended to look at the delivery of the
programme in a particular area with the provider's self assessment
markings being used. The Quality KPI looks at how well learners
achieve; the effectiveness of teaching, training and learning;
how well programmes meet the needs of their learners; and how
well learners are guided and supported.
14. In the most recent Star Ratings published
for the Employment Zones in April 2009, one provider scored the
maximum 20 points for Quality KPI despite coming 12th out
of 24 providers for job outcomes and 11th out of 24 providers
for sustained outcomes. Similarly, another contract scored 18 out
of 12 for Quality KPI despite coming 19th out of 24 for
job outcomes and 16th out of 24 for job outcomes.
15. If we assume that the Quality KPI is
important in terms of helping customers into employment, we fail
to see how there is such a disparity between the scores for Quality
KPI and the actual levels of job outcomes and sustained outcomes
being achieved. As this measure relies on the self-assessment
of the provider, we believe that Contract Managers may require
additional training so that scores can be properly audited. We
believe that some refinement is needed if Star Ratings are to
be seen as a genuine indication of both the performance and quality
of the service being delivered.
CENTRALISATION OF
CONTRACT MANAGEMENT
16. In responding to the Select Committee's
question regarding the centralisation of contract management,
we would argue that there is still a need for some clarity about
how the more centralised model of contract management works at
the local JCP level.
17. It is our opinion that there needs to
be greater clarity between DWP and JCP about who is responsible
for contract management, with clear information being provided
to JCP. On some of our contracts such as Employment Zones, we
are technically managed by DWP. However, the local JCP often request
the same information and data as the DWP contract team. This can
result in differences of opinion between the DWP contract management
team and the local JCP. For instance, there have been instances
with marketing material being approved by DWP, only for the local
JCP to request changes thereby incurring additional cost and time
delay for providers. We run Pathways contracts in four districts—each
piece of national marketing has to be signed off by each JCP District
Marketing Manager. In Australia the Department for Education,
Employment and Workplace Relations (DEEWR) provides clear guidance
to providers on central processes without complicated and lengthy
sign-off procedures. This is more efficient for providers and
taxpayers.
18. We take a very partnership based approach
to the contracts we deliver and want to work in co-operation with
local JCP offices. There is, of course, a role for JCP at a local
level to help inform the behaviour of providers and improve delivery
performance. However, as the sector moves to larger contracts
across multiple JCP districts we need to ensure that there is
a consistency in their approach to this.
CUSTOMER CHARTER
19. We welcome the development of a Customer
Charter so that customers, JCP and providers know what they can
expect of employment programmes. Reed in Partnership has had its
own Customer Charter in place for over five years. This sets out
our complaints handling process which is trained at induction
to our staff and explained when they start on our programmes.
We aim to respond to customer complaints via email or letter within
10 working days and make every effort to resolve the matter
as quickly as possible and to the customer's satisfaction.
20. The DWP Customer Charter should balance
the fact that some customers, especially those on mandatory programmes,
do not want to take part in activities. We therefore have to ensure
that the Customer Charter and any associated complaints procedure
does not allow people to "play" the system in terms
of delaying their active engagement in training programmes or
the Mandatory Work Related Activity element of Flexible New Deal.
October 2009
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