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Unrealistic pricing
Russell Webster

Russell Webster

Criminal Justice & substance misuse expert and author of this blog.

What can Transforming Rehabilitation learn from the Work Programme?

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Once again, the intensely party political shaping of public policy makes for uncomfortable results. It takes a politician with the drive and uncompromising approach of Chris Grayling to effect change within a five year cycle. But there is not sufficient time to establish a properly thought-through model which has a decent chance of delivering improved public services. In some ways Transforming Rehabilitation crystallises this problem - the payment by results pilots were cancelled in order to focus on a rapid roll-out of a completely untested model.

This is my final post based on the recent report published by the Institute for Government on how government is failing to manage outsourced contracts properly.

What was the point of the Work Programme?

The chapter on the Work Programme starts with a helpful historical recap reminding us that employment services had been outsourced for over 20 years and that PbR approaches had already been tried. The Work Programme was designed to tackle four key problem areas.

  1. Providers were paid a high upfront service fee, regardless of actual job outcomes achieved,
  2. They had insufficient incentives to focus on harder-to-place claimants,
  3. They were given little scope to design services around individual needs, and they
  4. Were allowed to remain in the market, regardless of the results they delivered.

 How has it performed?

In addition to overall poor performance in finding sustainable jobs (the latest data published in June 2013 found that the Work Programme was still falling short of its contractual minimum level of service – I rely on the Centre for Economic and Social Inclusion‘s authoritative, and mercifully short, summaries), the IfG identified three main problem areas:

  1. Creaming and parking – providers prioritised those claimants for whom it was easiest to find jobs to ensure their cashflow,
  2. The relative lack of innovation – which the payment by results commissioning model was supposed to stimulate, and
  3. The failure to attract new voluntary sector providers into the market (indeed several chose to quit the Work Programme, finding that their new contracts were losing them money).

What was the cause of these problems?

The IfG came to the conclusion that one of the key causes of these problems was an approach to pricing which stretched financial viability to the limit (the House of Commons Work and Pension Committee and Centre for Economic and Social Inclusion came to the same conclusion).

The unrealistic pricing was due to three converging factors:

Unrealistic pricing

 To my mind, the MoJ is at considerable risk of repeating the same mistakes as it seeks to privatise the probation service via its Transforming Rehabilitation project – new providers will have to deliver a better service to considerably more offenders for substantially less money.

What can TR learn from WP?

Most of these issues have been part of the public debate about the Work Programme for some time.

However, one aspect of the IfG’s analysis which was new to me was its identification of the “highly-personalised leadership” of the Work Programme project by Chris Grayling and a group of senior DWP officials:

“Chris Grayling came to the department …with a very specific idea about what he wanted to achieve: the Work Programme would be based on a ‘payment by results’, prime provider and ‘black box’ model. These key decisions were nonnegotiable. Grayling not only took a highly hands-on approach in the design of the programme, but set demanding timescales of less than a year for implementation…Grayling convened a tight coalition of senior officials from across the department, sometimes as often as two to three times a week.” 

This approach meant that the DWP completed a large-scale outsourcing programme in a very short period of time. However, it also meant that the departure of key individuals could severely disrupt its smooth running.

This was exactly what happened after the cabinet reshuffle in September 2012, when Mark Hoban replaced Chris Grayling as the Minister for Employment, coinciding with a high degree of churn of DWP officials which left providers confused as to who exactly was in charge.

There are clear parallels here with Transforming Rehabilitation whose timescale received a rapid acceleration shortly after Mr Grayling replaced Ken Clarke as Justice Secretary.

Indeed, there is one final similarity between the two programmes.

The IfG report found that the rapid pace of implementation resulted in the DWP’s risk management processes being sidelined, an issue that has already surfaced in the early stages of planning the outsourcing of probation.

Once again, the intensely party political shaping of public policy makes for uncomfortable results.

It takes a politician with the drive and uncompromising approach of Chris Grayling to effect change within a five year cycle.

But there is not sufficient time to establish a properly thought-through model which has a decent chance of delivering improved public services.

In some ways Transforming Rehabilitation crystallises this problem – the payment by results pilots were cancelled in order to focus on a rapid roll-out of a completely untested model.

 

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2 Responses

  1. That is helpful and supported by the renegade privateer Richard Johnson’s Blog – Spend to Offend which is one of the most informative things I have read about TR yet.

    I have no doubts that as set out an explained by the Lord Chancellor, TR will fail and I doubt if it will all even be implemented especially the over ambitious and ill thought out part that is the Offender Rehabilitation Bill. Hopefully that bill will only be enacted with major amendments about the detail of who is eligible for supervision and the manner of recall with some variation in supervision and recall lengths for different initial sentence lengths.

    It is obviously impossible to do all this on a 2/3rds budget and remain a decent employer as Richard Johnson implies.

    http://buyingqp.com/2013/06/17/spend-to-offend-the-outsourcing-of-probation/

  2. Hi there Russell,

    We here at the PCS union are very intersted in your work, we would be very grateful if you could send a copy of your publication: The Ten Commandments of Payment by Results

    We’d be happy to pay for it, but the Kinlde format is no good for our purposes – do feel free to contact me at: [email protected]

    Regards,,
    D…

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