The Work Programme: Providers and contracting arrangements

Written evidence submitted by Seetec

Introduction

· Seetec is a Department for Work and Pensions top tier provider with contracts for Flexible New Deal, Work Choice, Pathways to Work, New Deal for Disabled People, European Social Fund and JobCentre Plus Support Contract.

· Seetec also has significant Skills Funding Agency Contracts for Level 2 Apprenticeships, Response to Redundancy and Work Focused Training in addition to being the lead partner for the Westfield Stratford City Skills Academy.

· We have: 26 years’ experience of welfare to work and skills; £57m turnover, employ 850 staff; 75 delivery centres and operate in 7 of the proposed Framework lots in England and Wales.

· We have 56 contracts; 19 prime contracts managing 40 subcontractors, 250 delivery partners and 80 strategic stakeholders. We have worked with over 72,000 individuals in the last 12 months.

· Seetec has a strong background in IT services and solutions. We have developed our own in-house W2W IT applications covering Management Information, Customer Relationship Management and online learning. For 20 years, Seetec has provided bespoke software for the NHS market, predominantly primary care. This provides us with a strong skills set in person based IT systems and secure, electronic communication.

· For example, we were heavily involved in the "Choose and Book" pilot for the NHS, working with BT, Atos Origin and the NHS National Programme for IT to ensure the success of the project.

· We believe that we are in an excellent position to pass comment on the IT aspects and challenges of the Work Programme and would be pleased to give oral evidence to the committee should this be required.

Summary response to DWP Select Committee Inquiry into the contracting arrangements for the Work Programme

We have responded to the following key areas of the inquiry:

· The steps the Department of Work and Pensions needs to take to ensure that a procurement programme of this size and complexity is managed effectively and delivers high quality outcomes.

· The relationship between prime contractors and subcontractors and DWP’s role in overseeing this relationship.

Summarised below, we have identified a number of IT issues facing the Work Programme. These divert resources from front line delivery; reduce outcomes and the customer experience; and ultimately the effectiveness of the Work Programme and value for money for the taxpayer. We have made proposals and observations that we hope the Committee and DWP will find helpful to address the respective issues and challenges.

DATA BURDEN

The UK Commission for Employment and Skills 2010 Review (Interim Update 2010) cites a case study where the plethora of programmes and commissioning agents has resulted in providers, primes and subcontractors, operating with 16 different funders each with its own performance, data, audit and finance. The same customer data can be entered several times over to update each system. This diverts frontline resources from customers and outcomes; whereas leadership and management resources are diverted to meet excessive tender demands. As a subcontractor this can be further compounded by working with several primes, each with their own IT system.

In the short-term, the Work Programme reduces the data burden by rolling-up multiple DWP provision into a single programme. Within three years time, with 8 tier-one providers on each of the 11 Framework Lots bidding for future DWP and other commissioners’ provision, once again there is the potential for too much process, duplication of data entry and multiple systems across supply chains. Subcontractors could be working with 4 or 5 primes, each with different IT systems to update, aside from their own, and running multiple contracts e.g. for BIS, DWP, ESF. Once again, duplicate data entry will incur waste and create a bureaucratic burden deflecting providers from getting Work Programme customers into work, which will be further compounded by the huge customer flows (up to five times the current provision) and having to operate at far lower unit costs.

Challenge: Develop a "once only" core data set so that information is entered into provider systems with appropriate data exchange protocols to update prime and commissioners’ systems without the need for duplicate data entry.

INTEGRATING EMPLOYMENT & SKILLS

The Leitch Report (2006) recommended that the UK develops an "integrated employment and skills service to help people meet the challenges of the modern labour market".

With the Work Programme’s ambitions of sustained employment stretching out to two or three years and the BIS / SFA focusing provision on sustained job outcomes there is potential overlap within workforce development and for employers. It is imperative that DWP and BIS respond to the challenge of an integrated employment and skills provision to join-up and create a coherent service for the customer and employer. Taking forward the Leitch recommendation, the main findings from the UKCES 2010 Review Update confirm that "different commissioning and administrative processes in the employment and skills system results in duplication of work and a great deal of expense".

Removing data boundaries and departmental "walled garden" systems; working with common data and information, will enable Work Programme, skills and FE / HE providers to work collaboratively, within the localism and emerging local enterprise partnerships. In turn this will ensure their budgets can be pooled and limited resources are targeted at customers in a coherent pathway from education / welfare into sustained employment thus stimulating social mobility, business growth and community cohesion.

Challenge: The DWP and BIS to run a ‘removing duplication and data burden’ project across: DWP, BIS, other commissioners and Government agencies, primes, subcontractors and employers. Develop common standards and IT systems. Streamline and transform information processing across employment and skills providers. Ensure that DWP and BIS programmes are joined-up and focus at the individual customer level on sustained outcomes rather than contract / payment outcomes. Generate efficiency gains and savings so that Work Programme and skills providers can join-up their delivery and can truly deliver more for less.

DWP - PRaP

The Provider Referral and Payment (PRaP) system was introduced to improve the flow of referrals and payments between DWP and providers. Whilst it has improved the process, it has not been without issues. The starting point of the PRaP project was Oracle iSupplier, an off the shelf software product specialising in purchase order management. This has been modified to try and fit the needs of referring customers and paying for those purchases by treating them as orders. Internally, this project seems to have been viewed as an isolated task, rather than the start of a customer centric electronic customer record. This has led not only to implementation issues for providers but also an unnecessary administrative cost for a project that should have eradicated administrative issues rather than just changing them.

Challenge: To create a customer centric electronic record, shareable between DWP and providers to allow for current and historic intervention data to be recorded that can be kept up to date by all stakeholders.

DWP – SECURITY

Security protocols have been introduced in a culture of fear. Providers have implemented a blanket approach to mitigate any perceived risks of data loss stifling innovation and sharing of information. Subcontractors use systems and processes not familiar to them which can ultimately have a detrimental effect on performance management. Confidentiality has been the cornerstone of the ISO27001 Information Security implementation, rather than recognising it as just one aspect of Information Security - the Integrity and Availability of that data to stakeholders are equally vital.

Challenge: Provide guidance and an infrastructure that allows encrypted communication between DWP and providers so that we can all benefit from up-to-date and accurate information that informs us of the customers’ needs and ultimately helps the customer back into work. Form a working party with providers to agree an open, secure and encrypted standard to drive innovation and data usability.

CUSTOMER ASPECTS

Claimants must feel confident that they can move into work without the concerns of complex claims’ procedures and bureaucratic delays. To improve service and save money, the DWP has a target of 80% of JSA claimants using online systems to claim JSA. Benefit advice and the Universal Credit will be making heavier demands on claimant and employee use of online systems. Intellect , the IT organisation trade body estimate, along with BIS, that 20% of the working age population face the digital divide / exclusion, with the highest proportion being long term unemployed. The Work Programme customer group has the highest proportion of people lacking basic skills, IT core skills and elementary Internet / knowledge working skills.

Challenge: Ensure Work Programme providers develop claimants’ online and digital life skills to maximise JCP’s efficiency gains and savings. Encourage BIS / SFA to raise online and digital life skills within the replacement Employability Support Programme to address digital exclusion.

1. In the move to the Work Programme, the IT infrastructure at both the DWP and supply chain level needs to be agile, adaptable and fit for purpose. As a current Welfare to Work programme provider it is our belief that it is not and as such jeopardises the success of the programme. We are not aware of the existence of recommendations that will improve the situation. Whilst the Programme itself has a clear agenda, the transformation it aims to achieve is not underpinned with fundamental IT systems.

Data Burden

2. There is no standard guidance for subcontractors on how they are to handle customer data electronically. From our direct experience there are some Prime Contractors who take no regard of the security clearance of their subcontractors’ security status, imposing bans on recording any details of customers in local management systems. The subcontractor is completely reliant on the access rights they have been granted by the prime contractor to access data about the customers they are servicing. This effectively ties the hands of the subcontractor in analysing, real-time, the progression of their customers and has an obvious detrimental effect on performance. This will be magnified in Work Programme.

3. Through the Work Programme, a subcontractor may be awarded multiple contracts from multiple primes. Assuming the status quo is maintained this will place the following burdens on the subcontractor:

4. Duplication of data entry – on the prime contractor system and their own system, where allowed, for performance management.

5. Strict agreements denying them the right to input customer data into their own systems mean that contract management and outcome performance is totally dependent upon the prime contractor’s system.

6. There will be the need for staff to be trained in multiple computer systems. This costs money which is ultimately paid for by the taxpayer.

7. If the subcontractor is working with 3 different primes using 3 different systems (which is highly probable – of the top 7 current DWP welfare providers only 1 is using a non-bespoke system) they require 3 times the resource to key the data in or they will require employing full time data entry clerks. This is taking a step back in time from the current view of real-time deliverables.

8. Heavy end-to-end processing for the subcontractor and prime alike leads to a loss of efficiencies and increases the cost in a funding constrained environment.

9. With no strict guidance on the validity of data and claims (as witnessed through Provider Assurance Team (PAT) audits where there is clearly regional variance), the claims’ process has the potential of being different for each subcontractor’s contract even though the contract is the same – for example a prime may argue with a subcontractor that the job evidence does not meet the minimum requirements in a particular area where PAT has approved it. Although there is a strong case that a prime can run the contract in the way they choose, we should be mindful of smaller organisations and the impact that the lack of clarity may have on their cash flow and therefore operational capability.

10. We believe that there is a strong case for the DWP to set specific data exchange criteria within the supply chain for the betterment of the customer experience and to support the main agenda of getting customers jobs and helping them to sustain.

11. The sharing of data across the subcontractor network will allow providers to keep administration to a minimum and allow them to direct valuable resources into getting customers into sustainable work.

12. By allowing data to be shared, subcontractors can use their own processes, systems and methodologies that are proven to work for their business and their target customer, rather than being forced to learn and implement new IT systems i.e. a small provider may have an innovative way of assessing and moving customers into work that requires an IT based assessment tool. By not allowing providers to record information on customers, it is effectively stifling new and innovative practices that small businesses and providers traditionally bring to the table. Business processes should drive IT systems, rather than the other way round.

Integrating Employment & Skills

13. The SFA has provided specifications that allow both providers and software development companies to provide the means to communicate electronically with the SFA. This leads to greater efficiencies through less paper, less errors in claims and more accurate and timely payments

14. The MIAP project (LSC originally) issues the customer with a unique learner number, providing a "cradle to grave" identifier for the learning of that customer. It can be transmitted electronically as it has no direct relation to benefits/taxation or other personal data unlike the National Insurance Number.

15. The DWP and SFA do not share best practice around data; it is not joined up. If sustained employment, career advancement and social mobility are a joint objective of the Work Programme and SFA then we would recommend that this anomaly needs to be rectified.

16. The SFA has traditionally actively embraced the supplier/developer community via the Information Authority and the Data Service in order to help drive through the changes needed. This has worked well for all parties enabling both providers and the SFA to meet contractual change deadlines as well as providing providers/developers with a means of testing the IT solutions.

17. Annually, the Information Authority audits the requirements of the data stored on the Individual Learner Record to reduce the data and administrative burden on both themselves and the provider community. This is effective in reducing the burden, with clear specifications, deadlines and supplier community involvement.

18. Consideration should be given to forming a working party between the SFA and the DWP. This would allow for the sharing of data to truly enable a "cradle to grave" customer record supporting the mantra of ‘life long learning’. This sharing would provide a means for providers and customers to access a combined learning/DWP record.

PRaP

19. The Provider Referrals and Payment system (PRaP) was introduced at the beginning of Flexible New Deal. The system was poorly implemented with significant delays and outstanding issues. This has caused problems for the provider community as well as adding a significant time and cost burden. Given the size, complexity and potential funding arrangements the underpinning IT systems need to be ‘top drawer’ quality.

20. Since the introduction of FND, new referrals have been sent electronically via the PRaP. This system is a modification of an off-the-shelf product, namely Oracle iSupplier. Its roots are in purchase order management – allowing large corporations to set up purchasing through complex supply chains.

21. Whilst Oracle iSupplier has been modified to meet the needs of providing a referral and payment process for the DWP, there are a number of complex issues that its introduction has caused:

22. It is a closed architecture – the project has met the aims of the DWP (namely the electronic referral of customers and improving payments without the need for paper) but there is little scope for anybody e.g. providers to build on this platform without significant investment, which could allow for greater electronic movement of customer information.

23. Oracle iSupplier is purchase order based, not customer based. Of course, interventions happen to people, not to purchases. A DWP system needs to focus on what happens to the customer first. A referral is only one instance of what happens to a customer i.e. because iSupplier processes orders and not customers; it has a limited ability to identify the customer in this process, which means that multiple orders can be generated for one customer for the same provision. This leads to costly and time consuming reconciliation issues.

24. Due to security constraints imposed by the DWP, providers receive each referral via PRaP separately. A member of the provider’s staff then has to download an attachment and import this information to their own Management Information System. This is time consuming, resource hungry and costly. The number of administration staff needed at the provider end is directly proportional to the number of referrals. Resources which would be better utilised finding customers sustainable jobs. This has significant implications for Work Programme which we estimate will handle five times as many customers as any previous programme.

25. There are currently no systems that allow for an information flow from the provider to the DWP other than PRaP or antiquated written forms. Both Providers and the DWP are duplicating tedious and repetitive input to their own systems. By having to rekey data constantly increases human error, security risk and cost.

26. PRaP has no reporting facilities for providers or seemingly DWP alike. Without simple reporting mechanisms in place, providers and DWP have to manually match historic data and claims. Reconciliation is often timely and expensive both in time and human resource for both parties.

27. PRaP has an inadequate means of User Acceptance Testing – the recognised process in which all stakeholders of a project ("Users") test that the delivered solution meets both their needs and the original specification. It is this process of acceptance with project management that should deliver a product that is expected. Changes to the specification for the information transmitted are often late, as are the roll outs. Providers and developers are left to fix issues in a live rather than test environment. The knock on effect is that referrals are left in suspense; they cannot be processed effectively placing the referral and ultimately the customer in limbo. This represents poor customer service and has the potential of ballooning out of control in Work Programme with the increased flows of customers.

28. Consideration needs to be taken in making the referral process part of a wider scope of data exchange. Under a customer centric model, the payment model should either form part of the specification or be intrinsically linked via a unique ID. The unique ID would bear no relation to sensitive data such as the National Insurance number, thus increasing the security of the data. Historic data could then be requested, reconciled and sent electronically.

Security

29. Whilst we welcome the introduction of strong security protocols for data (using the International Standard ISO27001 as a basis) it has been implemented in a culture of fear.

30. The requirements are potentially constraining rather than providing a secure platform in which to operate; providers feel constrained around security as opposed to the risk management in place i.e. providers would prefer to do nothing rather than working within the risk management requirements as this is perceived to be the safest option, saving themselves from bad press and loss of contracts.

31. As the security requirements within DWP drive the data access and sharing protocols there is seemingly no evidence of forward thinking into how data can be shared or used. No provision has been made for how data can help and progress customers. There are also no provision for the sharing and collaboration of information across different providers with the DWP building an online information repository for customers.

32. A customer can have multiple providers over the course of their life time but each provider is unaware of what the customer has previously undertaken - due to the lack of electronic information exchange between DWP and providers because of DWP’s perceived data leakage risk; this can result in slow progression by the customer, inefficient practice and poor value for money for the DWP and the Taxpayer. There is not only data duplication but duplication of assessments of customers and interventions which have had no benefit.

33. There is no encouragement to provide a customer record which could be a "cradle to grave" summary detailing the interventions that a customer has received from the DWP and indeed other public bodies such as Local Authorities and the SFA. Due to the security concerns, providers are actively discouraged from creating such a record by placing single record (single customer) communication constraints. This single communication is not replicated in the paper world, where more realistic constraints are placed (depending on the contract) However, the NHS has embraced this as a key factor in reducing the data burden, reducing costs and driving up patient care. A key point for The National Programme for IT.

34. DWP Security is detached from the government Information Authority; rather than driving up supplier performance through the use of data, confidentiality is king; Confidentiality, Integrity and Availability (the CIA of ISO 27001) are equal partners. Confidentiality is the prime driver due to embarrassing data leaks. People are afraid to use data.

35. Consideration needs to be given to reviewing the process of security on data and how it impacts on the usage and availability for the DWP and providers alike; by considering Confidentiality, Integrity and Availability side by side with equal importance and analysing the risks, a culture of controlled, managed and secure communication with stakeholders could be implemented.

36. Consideration needs to be given to allowing encrypted communication in a common language for providers and DWP to share information using a centralised DWP owned core customer record. This would allow for more timely, accurate information to be shared across the network of stakeholders with single points of data entry.

37. The formation of a DWP led group could formulate a specification that stakeholders could work to, reducing the data burden but providing a robust, secure transport for this sensitive data. Some providers have agreed to support any pilot that the DWP would table, with the proviso that mutual agreement on the specification could be made. This, to date, has not been taken up by the DWP.

Customer Aspects

38. At the heart of the Jobcentre Plus (JCP) IT system for customers is the Labour Market System (LMS). This system provides JCP, amongst others, information about the customer with relevant markers/indicators primarily aimed at the jobseeker/claims process.

39. The DWP is unable to share LMS information directly with providers. Under the Work Programme, providers are taking a greater burden of the responsibilities associated with the customer. A previously proposed solution has been a dedicated console in providers’ premises. This is both unworkable and impractical. The data needs to be shared rather than the application it resides in. Having access to LMS will place a significant administrative burden on providers having to look up and cross reference data between systems.

40. A customer, on their journey, has to have numerous similar conversations with JCP and the Welfare to Work supply chain. Currently none of the information from these conversations is shared in a structured way. Little is recorded and when it is recorded, it is stored in an unstructured format, rendering it almost useless to providers.

41. To complicate matters further there are local variations of information stored on LMS. Across JCP regions, data fields are used for different purposes as advisers, with the best intentions, "shoehorn" relevant information into fields not meant for that purpose.

42. The Framework will allow providers to supply services across government departments. However, the data from the DWP is not shared. For example, If a provider wants to then move a customer from a sustainable job onto an SFA funded activity to increase the chance of sustainment, all the previously recorded data from this customer would have to be re-keyed into another system. There is a significant cost in terms of time, money, reputation and security none of which is justifiable within the current economic climate.

43. As outlined in the UKCES October 2010 interim update (Section 5.4, page 20), initiatives (such as PRaP) are driven from the top down creating a situation whereby the bureaucracy becomes central rather than the customer. By making the data customer centric, providers and the government alike can access and make good use of the information, providing a more seamless and integrated approach to delivery.

44. We believe that the DWP should give consideration to providing a shareable core record for stakeholders. This data is currently available in manual form to providers. Each provider then stores this electronically in their system. By owning a central record, human error and fraud is significantly reduced, as well as out of date conflicting information – especially in areas of high deprivation and transience, where the core area data may be changing by up to 40% annually.

45. Due to the digital divide, many customers face exclusion from jobs. Today, in a wide variety of roles, basic IT skills are seen as skills as fundamental as literacy and numeracy. Whilst basic skills screening is used by all providers, the approach to IT skills is not as uniform. There is scope within the Work Programme to improve basic IT skills and up skill customers to enhance not only their job prospects but ultimately their likelihood to sustain a job.

46. In DWP’s "Business Plan 2011-2015", Page 23, Section 6, point 6.1(v) DWP state that to save money they will "Increase the proportion of Jobseekers Allowance claims made online to 80%". This will also be achieved through the introduction of the Universal Credit (Page 7 Section 1). However, as stated by Intellect and BIS, 20% of the working age population face the digital divide. Although these two statistics add up, there is greater exclusion for Work Programme customers – the socially excluded and those with few or no qualifications. Digital life skills for Work Programme customers must be given a high priority. Without change the digitally excluded will also be potentially excluded from claiming online. The savings estimated to be made centrally will never materialise.

47. In "Digital Britain" – BIS, June 2009, Chapter 2, Point 9, the report states "the Internet is essential…….for the unemployed as more job search is conducted online" and then goes on to state "…and for the physically and socially isolated". The groups stated are the target customers under the Work Programme yet these are the highest group that face digital exclusion.

48. A main recommendation from the report is for adults to request up to 9 hours learning to cover a core set of online learning modules. This needs to be addressed in the Work Programme "black box" and joined up with complementary provision to allow customers to build their IT skills, interact with JCP online systems and increase their job chances.

49. As the report outlines on page 40, there is clearly a fragmented approach to digital literacy. Unfortunately, it is the customers of the Work Programme who are in the most need, being at the bottom rung of the ladder. Digital inclusion must be paramount for these customers to move on and learn digital life skills. However, the delivery of these skills is fragmented. There is no common, joined up approach to providing the excluded with these skills. It is important that DWP collaborate and link in with BIS and SFA initiatives and complementary programmes e.g. the SFA’s replacement Employability Support Programme

50. We believe DWP should engage with BIS / SFA to raise online skills of customers so they can access benefit advice, welfare claims and the proposed Universal Credit, when they are out of work and when they are in work. This will maximise not only the chances of returning to work but increasing their potential to sustain in work and progress.

Conclusions

In conclusion, the DWP and Work Programme should:

· Work with BIS collaboratively in two key areas: removing the data burden by collaborating and exchanging data and secondly to raise online skills with shared best practice for customers who are digitally excluded or those who lack digital life skills.

· Create or help create a customer centric electronic record that can be shared across government boundaries, and, importantly with providers. This will maintain the accuracy and timeliness of the data and reduce duplication, human error, resource and costs.

· Ultimately provide one "cradle to grave" record for the learner that is independent of the funding stream provider.

· Provide, lead and cooperate in the creation of secure electronic communication that requires no human intervention. A secure web site is not the solution.

· Revaluate the security principles currently governing DWP data and provide tools and infrastructure that allow for the communication of customer data in a secure and reliable manner that will improve the customer experience.

· Encourage and embrace the sharing of information, allowing providers at all levels within Work Programme the opportunity to maximise their ability rather than be strangled into using processes, procedures and IT systems that do not meet their needs. To also encourage a culture where innovation in delivery is king through the use of customer information

· Acknowledge that referrals only form part of the customer information flow rather than payments being the centrepiece of communication.

· Provide or encourage the development of core digital life skills learning material that is shared across Government departments, building continuity of approach for the customer regardless of their individual circumstance – to allow them to be actively included across the Work Programme and 21st Century Welfare Reform.

November 2010