Implementation review of transitional employment services 2017

Executive Summary

Introduction

As recommended by the Smith Commission, powers over certain employability services were devolved to the Scottish Government through the Scotland Act 2016. Powers were commenced in September 2016, with transitional employment services introduced in April 2017. These will support up to 4,800 people with health conditions and disabilities into work before the full devolved service (Fair Start Scotland) launches in April 2018.

SQW was commissioned to review the development and early implementation of the transition year services, namely Work First Scotland ( WFS) and Work Able Scotland ( WAS). The findings will feed in to and inform the development of Fair Start Scotland, as well as continuous improvement of policy and service design and delivery. The key questions to be addressed through the review were: what worked well; what worked less well and what would improve the pre-delivery and initial implementation phases in future.

Governance arrangements and stakeholder engagement

There is a clearly defined joint governance structure for the transitional employment services, which includes ministerial-level oversight and input.

The joint governance structure was found to be working well at both a senior and operational level, enabling early implementation issues to be addressed quickly and effectively.

In addition to participating in joint governance arrangements, the Scottish Government ( SG), Department for Work and Pensions ( DWP) and Skills Development Scotland ( SDS) each have their own internal governance and reporting structures relating to the programmes.

This multi-layered governance structure was at times found to have created challenges in terms of conflicting organisational priorities, as well as some overlap and delay in the decision-making process.

Access to expert resource and guidance has been a key success factor in shaping the design, development and implementation of the programmes. This has come through the establishment of a multi-disciplinary team within SG, engagement with Scotland's Devolved Employment Services Advisory Group and extensive consultation with stakeholders from across the sector.

Partnership working between SG, DWP and SDS

SG engaged DWP shortly after the Smith Commission recommended that powers over certain employability services be devolved to Scotland. This engagement has been maintained throughout, although the level and frequency has been variable depending on the stage of development.

The principles of partnership working between SG and DWP was formalised in a Memorandum of Understanding in October 2016. This was followed by a Service Level Agreement ( SLA) between the two organisations, which set out more detail on respective roles and responsibilities in relation to the transitional employability services.

The relationship between DWP and SG was reported to have developed over time and they have established increasingly effective ways of working together. This was helped by the development of a log for recording issues relating to WFS and WAS, which establishing a process for accountability, as well as an evidence log to support the test and learn approach of the transition year.

SG and SDS worked together on the design and development of WAS, although again the frequency and levels of engagement between the two organisations was variable throughout the process.

Partnership working between SG and SDS was widely reported to have worked well in the early stages, when there were very open discussions between the two organisations about the design of the programmes and how they should be delivered.

However, there were some differences in perspective between SDS and SG, partly resulting from differing expectations around respective roles and responsibilities in relation to WAS. For the other programmes that SDS deliver, SG is responsible for the policy and SDS is responsible for delivery, including programme design. This was different for WAS, with SG taking a much more active role in programme design.

From an SG perspective, the tight timescales and high profile nature of the transition year programmes, as well as the ongoing policy development and political interaction between SG and DWP, meant that the established working arrangements for programme delivery between SG and SDS were less appropriate for these new circumstances.

Programme design and development

• There were four key decision points that were critical in shaping the design of the transition year programmes. These were:
  • The decision to implement a transitional year ahead of roll-out of the full devolved programme.
  • The decision to develop two separate programmes – WFS and WAS – rather than a single programme.
  • The decision to give responsibility for each programme to a different body – the Scottish Government for WFS and SDS for WAS.
  • The decision to have a competitive tendering process for WAS, but a non-competitive tendering process for WFS, with existing Work Choice providers to ensure continuity in employability programme provision for the most vulnerable unemployed groups in the transitional year.
• The decision to have a transitional year was influenced by a significant reduction in the financial envelope for delivering devolved services, and a change to the point at which people would become eligible for the programmes (from 12 to 24 months). These changes were announced by HM Treasury in November 2015, thereby fundamentally changing the parameters of the employability programmes and funding to be devolved, and further compressing the time available to get a new programme tendered and operational by April 2017.
• Several consultees were of the view that a transition year was not ideal, particularly given the levels of frustration with the previous programmes highlighted during the consultation phase. But most recognised that it was the only feasible option within the changing financial position and the timescales available. It has also enabled lessons to be learned, which have and will inform the development of Fair Start Scotland.
• The requirements for WFS were already established (to provide continuity of support from Work Choice for disabled unemployed people). Indeed, the non-competitive procurement process meant that the scope for changing the service was limited. The requirements for WFS were reported to have been clearly communicated to providers, and there were opportunities for them to clarify what was needed to be developed and delivered through the programme.

A couple of consultees reflected that it was a challenge to separate the two programmes ( WAS and WFS) as it has created tension between SG and SDS over what is a relatively small budget. Rolling both programmes into one may however have brought other complications, such as whether a non-competitive action could be used, but it would have focussed attention on a single programme. In addition, the nature of section 31 of the Scotland Act would have required WFS to offer support for 1 year to those at risk of long term unemployment who were not disabled. This would certainly have been a significant material change to the existing Work Choice contracts which would have removed the option for an NCA.

There was concern from some providers that WAS was too prescriptive in relation to programme delivery (e.g. how often and how many times people are to be seen), which has limited their flexibility and scope to innovate. One lamented the loss of a 'black-box' approach, although an alternative view was that the 'black-box' approach can undermine transparency, consistency and quality of service.

Procurement

WFS was procured by SG through a non-competitive action with existing Work Choice providers. The process involved inviting existing providers to submit an 'Invitation to Negotiate'. SG then entered into detailed discussions and negotiations with each provider before the contracting stage.

SDS were responsible for the competitive procurement process for WAS, the approach to which was based on that used for other employability programmes (including the Employability Fund).

The procurement processes for both programmes were completed well ahead of time – providers were appointed and contracts in place within a relatively short timescale. Indeed, it was commented that contracts were agreed earlier than usual for programmes of this type, which was very positive.

A few consultees were of the view that, although having a non-competitive action for WFS was the pragmatic choice given the time limited nature and time constraints on the programme, it might have been better if the contract could have been tendered competitively. This would have enabled the programme to be changed to a greater extent and it would have made it easier to performance-manage.

There was some concern that SDS's procurement process for WAS was too onerous for the size of programme. This was felt to be at odds with the ambition to encourage small, local specialist suppliers to bid as many would not have access to the resources required to participate in the process.

Preparation for launch

As part of their preparation for launch, SG asked each WFS provider to develop a comprehensive Implementation Plan, which detailed the key activities that were to be undertaken to ensure they were prepared for their go-live date on 1 April 2017.

SDS oversaw the mobilisation phase of WAS and provided updates on progress to SG. In January 2017, SDS hosted a session with all WAS providers, the aim being for them to familiarise themselves with each other and to establish a collaborative approach to delivery.

Another key area of activity during the mobilisation phase involved preparing systems for monitoring and reporting programme activity. SDS used their Corporate Training System ( CTS) for WAS. SG agreed with the DWP that they would use their Provider Referrals and Payments ( PRaP) system for monitoring WFS activity.

SG had existing relationships with WFS providers prior to contracts being awarded and these continued into WFS. The engagement of providers in advance of procurement established a precedent of collaboration ahead of the mobilisation phase and ensured frequent and open communication.

Providers for both programmes reported that most issues could be resolved quickly as they were able to communicate openly with SDS and SG. For WFS, this was attributed to the collaborative approach to the mobilisation phase from conception through to completion. WAS providers cited access to a single point of contact within SDS as being particularly helpful.

The changes required to the PRaP system to meet the reporting requirements for WFS were reported to have been more extensive than originally envisaged. There were also legal protocols to be followed to ensure appropriate data sharing arrangements were in place.

Another issue that became apparent to providers during this stage was that the monitoring system for WAS ( CTS) was not set up to handle employability programmes in the way that they had been used to. WAS providers reported frustrations with CTS, stating that there were too many fields to complete which were taking up too much time.

SG, DWP and SDS created a national Implementation and Communication Plan to present information about WAS and WFS to JCP Work Coaches, who would be responsible for making referrals. However, this was reported to have been significantly scaled back by DWP from what was originally planned. SDS, providers and the SG all cited communication to Work Coaches as being a major challenge during this phase.

Early lessons from implementation

There was widely reported to be a good system of checks and balances in place, which have enabled SG, SDS and DWP to be responsive to unforeseen issues and challenges in the early stages of implementation.

In particular, a Joint Operational Group met weekly to keep everyone involved well informed on how programme delivery progressed and provide a forum for responding to issues quickly and efficiently.

At an operational level, there was provider acknowledgement that SG and SDS contract managers are seeking to work with providers to improve delivery.

At the time of the consultations, the volume of initial referrals were reported to have been lower than anticipated for WAS and sometimes inappropriate. The Joint Operational Group has subsequently worked to address these issues, which were attributed to: the programme being new; the limitations of having a single referral route ( JCP); the delay in briefing JCP Work Coaches; and a lack of detailed understanding about the client group and levels of demand for the provision.

Conclusion

The Governance structures for the new programmes received a wide range of positive comment. SG has been able to build its own capacity to deliver in a fairly short period of time. This has been helped through secondments and recruitment from DWP, as well as advice and guidance provided by SDS and other key individuals.

The decision to have a transitional year was widely regarded as pragmatic within the timescales available. It greatly reduced the risks around launching the new programmes and has created the opportunity to learn about a range of issues, which will benefit the full devolved programme starting in 2018. As already noted, while one combined programme in that period would have perhaps been easier to implement and deliver, the nature of the new devolved powers would have resulted in SG not being able to enter a NCA with Work Choice providers.

SG and SDS launched their programmes on time and relatively smoothly. Given that they were new programmes, and that this was a new area of activity for the Scottish Government, this is a significant achievement. Moreover, the experience of going through the design, development and implementation process provided valuable learning for the launch of future programmes.

As might be expected for the introduction of two new programmes, there have been some issues and challenges. These have mainly centred on the interaction between SG, SDS and DWP, who have had to establish new ways of working together. This is an on-going process and the review found evidence of improvement, with the three organisations finding increasingly effective ways of working together.