Implementation review of transitional employment services 2017

5. Programme design and development

Overview

5.1 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 contracted to ensure continuity in employability programme provision for the most vulnerable unemployed groups in the transitional year.

5.2 The design and delivery of WFS was built on the previous model of provision being delivered through the Work Choice programme. The tendering process was non-competitive as WFS was essentially a continuation of existing programmes. The main differences between Work Choice and WFS is that the former was open ended, whilst WFS aims to get participants eligible for work within six months. The job outcomes targets have also become more challenging. Existing providers were invited to negotiate the delivery arrangements with the Scottish Government.

5.3 The Scottish Government and SDS formed a working group to design WAS. In line with Ministerial policy ambitions, the programme was required to provide support to those individuals with a long term health condition that were in the Employment Support Allowance Work Related Activity Group and had been assessed as capable of work within a 12 month period. As neither organisation had experience of designing programmes for this client group, they also engaged a range of external stakeholders and partners, including the Glasgow and Clyde Valley City Deal team and disability representative groups, to provide input and guidance to the process.

What worked well?

The concept of having a transition year was seen as pragmatic and broadly welcomed.

5.4 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, subsequently limiting the time available to get a new programme tendered and operational by April 2017. The consensus was that the transitional year was the pragmatic choice. One provider stated that the interim programme was a good idea, as going straight from Work Choice to a new programme would have been too risky – both reputationally and politically.

5.5 To have developed a wholly new programme within the timescales would have been challenging for the Scottish Government as they did not yet have a team in place to deliver. Moreover, this was compounded by the UK Government announcing an intention to replace Work Programme and Work Choice in other parts of the UK also by April 2017, which meant a lack of awareness of wider changes around DWP programmes for the client group in other parts of the UK. One consultee reported a perceived desire to fit in with these in Scotland for fear of introducing too much change to the system at any one time. In this context, the decision to award contracts to existing Work Choice providers through a non-competitive process was the only feasible option. SDS had pre-existing established processes for competitively tendering employment and training programmes and were therefore able to proceed with a competitive procurement process for WAS within the timescales available.

5.6 The decision to have a transition year has allowed lessons to be learned which have and will inform the development of Fair Start Scotland. Examples include around the IT system, where for the current programmes the DWP system was tweaked, but going forward a new bespoke system will be developed (this would have been challenging to do in the timescale and given the lack of in-house resource); and some of the issues around governance and sharing referred to in Chapter Two have been worked through.

The open communications around the tendering of WFS were welcomed.

5.7 The requirements for WFS were already established (following on from Work Choice), Indeed, the non-competitive procurement process meant that the scope for changing the service was limited. The requirements 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.

5.8 The level of communication with the Scottish Government in the development of WFS has been highlighted by providers as valuable, with one provider stating that it was the most involvement a funder has had in the set-up of a programme. The Scottish Government was willing to take on board the providers' experiences of delivering Work Choice in developing the programme. In this context, the decision to award contracts non-competitively was likely to have been factor in enabling a more open discussion to take place.

5.9 One provider stated that they were happy to use DWP processes in the delivery of WFS given that they were familiar with these and they had worked well in the delivery of Work Choice. This represents a further benefit from the continuity of approach.

What worked less well? What are the challenges?

The transition year has been at odds with some expectations of more radical change.

5.10 The Scottish Government was midway through an iterative process of public consultation and policy development on the newly devolved programmes when it became clear in the November 2015 UK budget statement that the available budget to deliver these was to be significantly reduced at the point of devolution, and the point at which people would become eligible for devolved support services was changed from 12 months unemployed to 24 months unemployed. This led to the decision to implement a transition year to give more time for the fully devolved programme to be designed and developed, as well as to provide the opportunity to test and learn. Several consultees were of the view that this was not ideal, particularly given the levels of frustrations with the previous programmes which were highlighted during the consultation phase, but most of this group recognised it was the only feasible option within the timescales available.

5.11 A couple of consultees referenced the costs associated with the transition year. These were said to have occurred at several levels:

• The Scottish Government had to pay for DWP's IT system to be configured for the new programme. This capital cost only covers one year, as a new system will be required from 2018 (although, it does include contingency for the system to be used in 2018 should that be required).
• The increased design and development work incurred through the programme groups, as they have in effect had to develop three separate programmes.
• Providers have to write two tenders for 2017 and 2018.

Having two programmes spread the workload, but has created challenges for partnership working.

5.12 Similarly, a couple of consultees reflected that having to separate the two programmes ( WAS and WFS) was unfortunate, as it has created a number of challenges for both Scottish Government and SDS over what is a relatively small budget. Rolling both programmes into one would however have brought other complications in particular the requirement in section 31 of the Scotland Act 2016 which requires that support for those at risk of long term unemployment but not disabled should last one year. This would have constituted a material change to the existing Work Choice contracts which would have meant the Non-Competitive Action would not have been possible.

5.13 However, it was recognised that even the development of WAS was pressured due to the time available. Therefore, extending the need for further development work for a wider programme may simply have been a step too far. It would also have caused problems if the Scottish Government was to lead the implementation given the resource constraints described above.

It can be challenging to meet public service expectations.

5.14 All parties recognised the challenges of setting achievable performance targets for a new programme (especially given the new client group). There was concern amongst some consultees about the performance expectations for WAS in comparison to other DWP-run programmes, especially when the spend per head and the delivery models were broadly aligned to what went before. This is not to say that providers and agencies are not taking their targets seriously (they are), but simply a reflection on the process and thinking that goes in to deciding these targets.

5.15 One related frustration from providers was a reported lack of timeliness of when data on the new programmes will become publicly available. The first set of statistics for the new programmes will be published towards the end of 2017, which was seen by current providers as too late to influence their planning for the 2018 programme. However, whilst final figures won't be published until the end of the year, monitoring and performance data and learning has been available to current providers, the Scottish Government and SDS throughout, to monitor performance, encourage continuous improvement and inform planning for the 2018 programme.

The delivery models have raised frustrations with some feeling previous experience has not been built on.

5.16 There was concern from some providers that WAS is prescriptive in relation to programme delivery. This approach was adopted to ensure specific expectations of levels of service: including how often and how many times people are to be seen to deliver a consistent and coherent standard of service. Some feel this limits flexibility, for example, one provider thought that the length of time from referral to starting work was too short and not likely to not work in practical terms for the client group, who can be unpredictable, meaning that they need to be supported over a longer period of time. Some providers were concerned that their scope to innovate or draw on their experience was limited by the programme design; for example one lamented the loss of a 'black-box' approach (the Work Programme approach whereby the DWP was interested in job outcomes but allowed contractors to decide how to these).

5.17 SDS felt that the influence of DWP was reflected in the delivery model at the expense of their own experience in Scotland. For example, a service fee is being paid based on projected recruitment rather than actual numbers, and having a single provider in each area increases risk if that provider does not perform. This is an approach that SDS does not usually take, preferring to work on the basis of outputs and outcomes. A small number of consultees expressed concern that the payment model risks having insufficient incentives, both for recruitment and later for job entry, due to the high level of service fee and the low level of job outcome payments. However, others argue that the payment model enables smaller providers to make up-front investment in the programmes.

Lower than expected initial referrals to WAS was identified as an early implementation issue.

5.18 Several consultees cited lower than anticipated initial referrals to WAS as an early implementation issue. In relation to this, providers reported frustration that there were no indicative targets set for the volume of referrals that would be expected from JCP. However, this is not something that DWP would have considered as their model involves referring the right people to the right provision at the right time. In this context, low referrals could be perceived as a mismatch between supply and demand for the provision, and a clear conflict in expectations which could continue to be an issue in future. However, it is also likely to be related to the fact that it was a new programme for a new client group and therefore took time to become fully established.

5.19 WAS providers are able to actively market and promote the programme to potential clients through their own networks, although referrals must be made through JCP reflecting the reality of the interaction between reserved and devolved responsibilities. Some providers reported that they would have liked more scope to reach out and recruit clients directly through links in the community, rather than being reliant on JCP for referrals. This was perceived as offering a way to mitigate the risk around having a single referral route and the limited extent and frequency of contact that JCP (reportedly) has with the target client group.

5.20 While again, using DWP client definitions to determine eligibility for services reflects operational reality, there were some frustrations expressed in relation to the definition of the client group. Whilst conceptually people understood it, some argued the definition was not helpful in practice. Moreover, there seemed to be limited information about the scale of different sub-groups, or around particular issues faced.

5.21 In hindsight, DWP recognise that they could have spent more time working with the Scottish Government on the volumes of referrals expected and to understand the WAS client group. This would have been particularly useful given that it is a new client group and there was limited knowledge about the overall scale of specific needs, within a fairly broad definition. This lack of clarity around the potential needs of users contributed to making the procurement process for WAS more onerous than perhaps it should have been for providers (discussed further in Chapter five).

New programmes have specific monitoring and reporting requirements. Earlier notification of what these should entail would have been helpful.

5.22 Two providers noted that they had to update their monitoring systems to meet the reporting requirements for WFS. One provider stated that there could have been clarification at an earlier stage surrounding these reporting requirements. Similar concerns were also highlighted in relation to WAS, where a provider stated that SDS wanted data to be displayed in a particular way, however this was not consistent with the way employability data was usually presented by that provider.

5.23 There was also reported to be some changes to monitoring systems introduced by SDS to ensure alignment and consistency with what was being collected for WFS. While this was a reasonable expectation, and is fairly typical of the activities associated with the introduction of new programmes, it does highlight a learning point around alerting providers to these at as early a stage as possible.