Supplementary memorandum submitted by
the Department for Work and Pensions (DWP) (EP 17)
QUESTIONS ARISING
DURING ORAL
EVIDENCE
1. The Committee has been informed that in Pathways
all third sector subcontractors are no longer working for the
prime contractors. Can you please confirm (a) how many third sector
subcontractors there were in total under the Pathways contracts
and (b) how many of these are still working for the prime contractors.
(a) How many third sector subcontractors
were there in total under the Pathways contracts?
There were 33 third sector sub-contractors delivering
Pathways to Work when contracts were let. Some of these organisations
were sub-contracting to different prime contractors or delivering
in more than one location.
(b) How many of these are still working for
the prime contractors?
Of the original 33 sub-contractors involved
in delivering Pathways to Work, 28 organisations are still involved
in delivery.
Prime contractors have a range of partnership
agreements with third sector organisations, for example, sub-contracting,
service level agreements and informal partnerships. In answering
this question, only sub-contracts and service level agreements
have been included as these are deemed to be formal arrangements.
2. In his evidence MoS EWR said that outcome payments
are not made for zero hour contracts. However this is inconsistent
with the scenario in the Benefit Busters programme where a great
deal of emphasis seemed to be placed on securing zero hour contracts.
The Committee would like further information on outcome payments
for zero hour contracts, particularly whether outcome payments
could be made where someone is working (even part-time) but has
a zero hour contract.
Payments to providers for job outcomes are made
on the basis of weekly hours worked and the length of time the
job has lasted or is expected to last, depending on the provision,
irrespective of the contracted basis for the job outcome. Whether
a customer has found work through provision that pays providers
for a job expected to last 13 weeks (eg Pathways), or that has
lasted 13 weeks (eg FND), the provider has to have evidence from
the employer that the job fulfils the criteria in the provider's
contract in order for us to pay for the outcome. If a person has
a zero hours contract but the employer confirms in writing that
the job is expected to last 13 weeks and is at least 16 hours
per week (eight in the case of Pathways) then we would pay for
the outcome. If the employer is not prepared to make this declaration
then the provider cannot claim for the outcome.
SUPPLEMENTARY EVIDENCE
3. Does the ban on perverse incentives mean that
individual bonuses are not permitted across the board or is there
some flexibility for providers to interpret the rules and award
bonuses?
There is some flexibility for providers to award
bonuses. The checks on providers' processes by the Provider Assurance
Team will ensure that any bonus system does not create a perverse
incentive to make fraudulent outcome claims.
4. The Committee has been told that off benefit
checks are only 50% accurate. Why does the Department not use
HMRC data to cut back on the paperwork required? The 50% quote
came from a DWP report on the destination of benefit leavers which
stated that only 50% leave for to take up a job.
The 50% accuracy rate quoted represents a percentage
of all benefit leavers and does not apply to the "off benefit
check" of providers' outcome claims where providers have
evidence that the customer has been in work for 13 weeks. Where
DWP undertakes an off benefit check to validate a provider's claim
for an outcome payment (for example the automatic check the Provider
Referral and Payment (PRaP) system will undertake for Flexible
New Deal) a sample of the claims will be subject to a further
check directly to the employer and/or the customer.
There is a six month lag before HMRC data becomes
available which means this is not a suitable source of evidence
on which to make payments to providers.
5. This is another question about the ministers
session on Management of Contracted Employment Programmes. In
oral evidence we were told that of all the fraud investigation
only 16 cases were of probable document falsification were found.
However in written evidence you said 14. Which is correct, or
is it a matter of one is more up to date?
The 16 cases quoted at the Select Committee
Hearing is an update on the 14 cases quoted in the DWP Memorandum.
Between 1 April 2006 and 31 August 2009, 78 investigations were
initiated. As at 31 August 2009, in 14 of these cases evidence
of wrongdoing had been discovered, eg evidence that documentation
included, or might include, deliberate false representations.
As at 20 November 2009, a further two on-going investigations
had progressed sufficiently to establish evidence of wrongdoing,
increasing the total from 14 to 16.
The breakdown of the programmes for the 16 cases
where evidence of wrongdoing has been discovered through investigations
initiated between 1 April 2006 and 31 August 2009 is as follows:
New Deal overall comprising
New Deal for Young People 3
New Deal 25 plus 3
New Deal for Disabled People 1
New Deal Prime Contractor **1
| 9 |
| Progress to Work | 1
|
| Workstep | 1 |
| European Social Fund | 2 |
| Employment Zones | 1 |
| Ethnic Minority Outreach | 1
|
| Action Teams | 1 |
| ** the abuse was across a range of New Deal programmes being delivered by a single New Deal Prime Contractor and is separate from the other eight incidents.
|
November 2009
|
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