What should Work Programme 2 look like? Sean Williams, Managing Director, G4S Contact Centres, G4S Employment Support Services, G4S Investigations, G4S Resourcing.

10 Recommendations for Work Programme 2 Compete on quality not on price; Take past performance into account when awarding contracts; Use hard data to inform policy making; Utilise a more sophisticated differential pricing model than benefit-type; Actively and regularly manage performance including removing contracts and moving customer flows; Broaden criteria for referral to include benefit cyclers; Roll-up skills-funding into the Work programme to be fully distributed by Prime Contractors; Don’t abandon the Black Box; Set realistic targets; Ring-fence an up-front budget dedicated to innovation and the inclusion of niche third party specialists.

The Work Programme so far…

Compete on quality not on price In a Payment by Results system the aim is for a high investment/high return model; The cost of a programme is not just the cost of delivering the service. It is the cost of delivering the service plus the cost of failure; The Work Programme has not increased investment in back-to-work services in the UK – there has been a 52% reduction in the amount spent on employment programmes compared to 2010-2011; The danger of competing on quality is that there is a race to the bottom and we get low-investment low-return services that save the taxpayer money in programme spend but cost the taxpayer more money in benefit spend; The very tight funding on Work Programme has stifled innovation and has led to a ruthless focus on what works to the exclusion of what might work.

Take past performance into account when awarding contracts To date an extra 10,000 people would have found sustained jobs had the bottom half of providers not been delivering the Work Programme; That’s £50 million a year in annualised benefit savings; Past performance is by far the best indicator we have of future performance; Special rules can be put in place to protect new market entrants.

There is a Massive Differential in Prime Contractor Performance

Use hard data to inform policy making Performance data can be difficult to understand in welfare-to-work; Need a nuanced approach that understands the key variables including: Price; Voluntary/Mandatory; Measurement period and point. We need to compare apples with apples (for a particularly economically illiterate example of not doing this see the ‘Getting London Working’ paper by London Councils); But the data (properly presented and interpreted) doesn’t lie and we should use it to determine our activity and policy.

Utilise a more sophisticated differential pricing model than benefit-type Differential pricing is not working in the Work Programme nor is it driving front-line behaviour to any meaningful extent; Benefit-type is a very poor proxy for level of need; Cumulative length of time on benefits is a better proxy; There is some argument for a Jobseeker Classification Instrument BUT: Bayesian and iterative; Allow human override.

Chess Playing Computers Today computers beat all humans at chess; But a Grandmaster playing with a computer beats a computer playing on its own; There are still insights that humans have that chess machines do not.

Without real consequences there is no real competition; Actively and regularly manage performance including removing contracts and moving customer flows Without real consequences there is no real competition; Competition drives performance; Moving customer flows from an organisation achieving 20% outcomes to one achieving 40% outcomes doubles performance with those moved flows; Empirical evidence backs up the theoretical assertion.

Evolving the Supply Chain Works Job Starts pre and post supply chain change

Broaden criteria for referral to include benefit cyclers Current rules mean that short-term jobs can leave individuals who would benefit from the Work Programme unable to access it; Universal Credit should help to remove this problem but will create new entry criteria challenges; Anyone over 25 who has been out of work for 12 months in an 18 month period should be referred to Work Programme 2; Anyone between the ages of 18-24 who has been out of work for 9 months in a 18 month period should be referred to Work Programme 2.

Genuine 100% pass-through; Roll-up skills-funding into the Work programme to be fully distributed by Prime Contractors Some excellent work being done on the ground to join up funding streams but this work is duplicated and piece-meal; All employment-related skills funding in an area should be given to the Prime Contractors to distribute under Work Programme 2; Genuine 100% pass-through; This would for the first time properly align skills and employment provision;

Don’t abandon the black box Black Box (with payment by results) creates the best conditions to guard against parking; It is not possible to achieve a step-change in performance without appropriately supporting every individual; Centrally prescribed minimum standards lead to less personalised support not more; Centrally prescribed minimum standards lead to casuistry.

Situational Approach: G4S’s Situational Approach is proving more effective than traditional rule-based models… Situational Approach: Proven; Pragmatic; Personalised. ‘Appropriate’ support not ‘identical’ support; Quality measured through observation, narrative and questioning. Not through tick-boxes.

Set Realistic Targets Unrealistic targets can create negative media coverage out of the most successful programmes; Don’t want to set Work Programme 2 up to fail from the start; This is an optimism business; Need a range of measures to capture the complexity of employment-programme provision; Cohort-based measures are highly effective; Need to look at lead-measures such as job starts; There is a wealth of really sophisticated modelling that exists around job curves and improvement curves – we should use it.

The head-terms dictate the subcontractor-terms to a very large extent; Ring-fence an up-front budget dedicated to innovation and the inclusion of niche third party specialists. The head-terms dictate the subcontractor-terms to a very large extent; Primes have fallen back on a what works approach not a what could work approach due to the severe funding pressures of the Work Programme; DWP has a role as market maker here. If DWP genuinely values niche third party specialists then they need to create the conditions for Primes to use them.

Questions and Discussion…