Memorandum submitted by Ingeus UK (EP
15)
INTRODUCTION AND
SUMMARY
1. Ingeus UK, formerly known as WorkDirections,
is part of the international Ingeus group of companies, delivering
welfare-to-work services in the UK, France, Sweden and Germany.
Since 2002 we have helped individuals into employment through
our Private Sector Led New Deal, Employment Zone, New Deal for
Disabled People (NDDP), London Development Agency, European Social
Fund and Pathways to Work programmes. We have been awarded two
Flexible New Deal contracts for Leicestershire, Northamptonshire
and Nottinghamshire and also for Edinburgh, Lothian and Borders,
Lanarkshire and East Dunbartonshire, Ayrshire, Dumfries, Galloway
and Inverclyde.
2. Ingeus welcomes the Committee's inquiry.
An effective system of contract management and quality assurance
is key to ensuring that the employment programme market delivers
for the customer/jobseeker, and the Government and taxpayer. Our
position is outlined in the papers "Buying quality performance"
(July 2006) and "Performance measures for welfare-to-work
programmes: The relevance of Australian star ratings to the UK"
(July 2007).
3. Since 2002, when Ingeus began delivering
DWP programmes, the Department has made significant progress in
developing the contract management framework. However, the full
impact of the shift outlined in the Department for Work and Pensions
Commissioning Strategy is still feeding through into contract
management and implementation of employment programmes.
4. There is a need for more investment in
contract management and supplier relations in order to drive further
improvements. The move towards the prime contractor model will
change the role that DWP needs to play in ensuring that public
funds are protected and that best value for money has been obtained.
5. Prime contractors have taken on the responsibility
for fraud prevention and detection and for ensuring quality delivery
throughout their supply chain. They will be investing in systems
and staff to ensure they can fulfil those responsibilities.
6. DWP resources should not duplicate this
investment. DWP contract management could be strengthened by increasing
spot checking, and verification of systems and procedures. Providers'
assessment of the quality of their own provision should be independently
verified and a better understanding of what quality means for
customers is required.
7. DWP needs to strengthen its ability to
ensure not only that public funds are protected and best value
obtained but that all customers receive a good quality service.
Research into customer satisfaction is a welcome step but further
work is needed to see how the customer charter and a customer
satisfaction metric can be used to drive quality improvements.
8. DWP, Jobcentre Plus and providers need
to work in partnership to drive performance and quality improvement.
Increasing customer voice in services may highlight areas where
current processes are inefficient and affecting customer confidence
in the welfare-to-work system.
CONTRACT MANAGEMENT
AND FINANCIAL
ASSURANCE
9. Safeguards are in place to ensure that
providers are only able to claim outcome-related payments when
customers have moved into employment.
10. During the procurement process, all
providers outline their Fraud Prevention Strategy and Protected
Disclosure Policy as part of their bid for contracts. Prime contractors
also outline how they will ensure that these are implemented throughout
their supply chain and how subcontractors' capacity in these areas
will be built to ensure claims for payment are legitimate.
11. Recent changes to DWP contracts reinforce
prime contractors' responsibility for fraud prevention and detection
throughout the supply chain. The consequences of failing to meet
these responsibilities are clearly outlined (financial penalties
and the potential for contracts being withdrawn).
12. Provider payments for job outcomes and
sustained job outcomes have previously been dependent on providing
a correctly completed job evidence form (called a stencil). This
system is highly resource-intensive as providers have to employ
a team of staff to chase employers and employees to gather the
evidence. In some instances (particularly if the evidence was
needed for a 26-week sustained job outcome) the employer and/or
employee would not want to complete the paperwork. Customers who
move into work often do not want their employer to be contacted
due to fears of the stigma associated with having been long-term
unemployed.
13. An alternative to providing job evidence
stencils is to check whether the individual has stopped claiming
out-of-work benefits. This approach has been introduced for Pathways
to Work and is expected to be the method for evidencing Flexible
New Deal outcomes. This is a significant step forward as it will
allow resources previously used to gather evidence to be used
to support customers.
14. Concerns have been raised about a wholesale
move to using "off-benefit checks". In the short term,
the Department for Work and Pensions could test the system by
contacting a sample of employers to verify the employment outcomes
alongside the "off-benefit" check. Over the longer term
the Government should work towards a system where HMRC data can
be used to verify that someone has both moved off benefits and
into work.
15. The proposed Provider Referral and Payment
system has the potential to ensure consistency of provider and
DWP payment team information in relation to claims relating to
job outcomes. This system is not yet operational but should also
allow for strengthened analysis of patterns of payment claims
to identify any risk areas—for example low sustainability
rates for a particular employer at 26 weeks.
16. The move towards a prime contractor
model will see increased responsibility for prime contractors
to build the capacity of their subcontractors in this area. In
addition, the scale of FND contracts and the increasingly large
and complex supply chain will mean that Prime Contractors have
to develop more extensive internal assurance and process checks.
17. In a system with multiple tiers it is
important to clarify the roles of Contract Managers at the central
DWP level and the role of Third Party Provision Managers at a
local level. This clarity will be important both for Prime Contractors
and their subcontractors (eg prime contractors may be dealing
with DWP, and subcontractors regularly interacting with the TPPM).
18. Ingeus has established processes with
our subcontractors to support and improve the audit and fraud
prevention processes of our supply chain. These draw on the risk
rating and assurance model developed by DWP. Ingeus' quality and
financial assurance staff have the experience and operational
background to be able to support subcontractors and develop appropriate
systems and safeguards.
CONTRACT MANAGEMENT
AND QUALITY
19. DWP is responsible for ensuring that
the standards of quality delivered by providers is commensurate
with contract terms although contracted provision can be inspected
by Ofsted (Office for Standards in Education[55]).
20. DWP uses the Ofsted Common Inspection
Framework (CIF) in its contract management framework to assess
quality. The four key questions of the CIF focus on how well customers
achieve, how effective teaching, learning and training are, how
well customers are guided and supported, and how well programmes
meet the needs and interests of customers. Concerns have been
raised that these questions are more appropriate for education
and learning provision than employment programmes.
21. In addition to CIF-based assessment
frameworks DWP also includes minimum requirements in its contracts
with providers (for example fortnightly interviews for customers
on Flexible New Deal).
22. As well as ensuring that providers meet
minimum standards, consistent and transparent assessment of the
quality of employment programmes can inform contracting decisions
and customer choice.
23. There is a need to strengthen DWP's
ability to assess and measure quality on an ongoing basis. Current
assessment methods rely on providers' own assessments of the quality
of their provision and there are not sufficient safeguards to
ensure that these assessments are made on a sound or consistent
basis between providers and across Contract Managers.
24. Increased flexibility for providers
in designing their programmes to meet individual customers' needs
(through commissioning of "black box" programmes) can
make comparisons of quality challenging. However, the move towards
measuring sustainability of employment outcomes at 26 weeks
has provided a good (and comparable) indicator of quality. This
needs to be supplemented by increased spot checking and interaction
with customers by DWP rather than increased paperwork and prescription.
Moves to measure quality must not undermine flexibility, innovation
and performance improvements.
25. DWP is committed to conducting Quality
Audits involving remote spot checking of action plans and case
notes. This approach could provide a sound basis for developing
a system for the direct evaluation of the quality of interactions
between advisors and customers but more site visits and engagement
with customers could verify providers' own assessment more comprehensively.
26. It is important that quality assessments
conducted as part of contract management are included consistently
and transparently in Star Ratings. On two separate occasions,
Ingeus' full financial assurance and monitoring (FAM) rating was
not included in these calculations, which affected the star ratings
result. This is part of a broader concern that Contract Managers
need to act as the focal point for ensuring that action plans
for providers respond to FAM and Ofsted results.
27. In general, Ingeus believes that the
current star ratings system is flawed and needs to be revised
in order to provide a fair, transparent and consistent measurement
by which provider performance and quality can be compared.[56]
28. Assessing and measuring quality needs
to be linked to clear actions. This is both in terms of action
plans for improvement and contracting decisions that inform customer
choice in a clear and transparent way.
CONTRACT MANAGEMENT
AND THE
VOICE OF
THE CUSTOMER
29. Ingeus welcomes the principle of a customer
charter although it is unclear how the charter will apply or be
adapted for use in contracted employment programmes. Customers
need to understand what they can expect from employment programmes
and also what their responsibilities are.
30. The DWP Delivery Unit is currently working
with researchers to understand which factors are important to
customers in service delivery and how they understand quality.
Investing in assessing customer experience will add value to quality
assurance and could improve the current star ratings by adding
a customer satisfaction measurement.
31. In June 2008, Ingeus published a research
paper on the role of "Choice and Voice in welfare reform".
It argued that customer feedback collected and managed in the
right way could improve service design, performance measurement
and contractor accountability as people claiming benefits are
a critical source of information about the service that will work
best for them.
32. When measuring customer experience of
contracted employment provision it is critical to recognise the
ongoing responsibility of DWP and Jobcentre Plus. Customer experience
may be significantly affected by the interaction between the benefits
or decision-making and appeals systems and contracted employment
provision.
33. DWP, Jobcentre Plus and providers must
work together to ensure that the whole welfare-to-work system
safeguards public funds, drives performance improvements and ensures
quality for all customers.
October 2009
55 Ofsted inspections are infrequent and even with
increased contract lengths (five years for Flexible New Deal and
Jobcentre Plus Support Contracts) it is unlikely that any contract
will have more than two full inspections. Back
56
Ingeus published a paper, "Performance measures for welfare-to-work
programmes: The relevance of Australian star ratings to the UK"
(July 2007), to inform development of a UK star ratings system. Back
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