Hosted by: Funded by: The third sector and welfare delivery: experiences of the Work Programme James Rees With Rebecca Taylor and Chris Damm

CONTEXT Position of third sector providers Isomorphic Pressures Creaming and Parking Resource squeeze

Context Outsourcing/contracting out well established Public services reform – Open Public Services Welfare to work and work programme one part of welfare reform picture Role of third sector in ‘Big Society’ Quasi-markets Network governance New institutionalism

Our research Does sector matter? Understanding the experience of providers in the work programme TSRC working paper 92 -We wanted to explore experience of all providers not just TSOs -Early days in Work Programme set up -Challenge some of the media and academic presentations of ‘sector’

Our research questions 1.What do third sector providers do and is it different to what other providers do? 2.How have providers experienced the early delivery of the work programme? 3.What are stakeholders’ views of the value and distinctiveness of third sector provision?

Methodology Evidence review; policy papers, literature, w2w evaluations – summer/autumn 2011 Stakeholder interviews; sector infrastructure, w2w commentators, Primes – winter 2011/12 Focus on 2 areas (CPAs) capturing different labour markets profiles and supply chain models – Subcontractor mapping, phone survey and focus groups; providers from all sectors in supply chains – March-May 2012 – Subcontractor case studies, all sectors; May-July 2012

The model Single programme for all jobseekers Black Box and payment by results with a back-ended profile to reward ‘job outcome’ sustainment Differential payments by customer group 18 contract package areas (CPAs) covering the UK with 2-3 primes in each area = 40 prime contracts Supply chain subcontracting divided into Tier 1 (end to end provision) and Tier 2 (specialist) DEL-AME funding, part funded by savings from benefits budget

Prime Contractor End to end providers (tier 1) End to end providers (tier 1) Specialist provider (tier 2) Specialist provider (tier 2) 18 Contract Package Areas (CPAs) covering UK, 2-3 primes per CPA, 40 contracts 18 Prime contractors (2 TSO, 1 Statutory) Degree of referrals retained or passed to subs varies greatly Delivery / Job Outcomes Estimated 19% delivered by TSOs (vs 30% rhetoric) Referrals from JC+ The Work Programme Direct (in house) Delivery Direct (in house) Delivery End to end providers (tier 1) End to end providers (tier 1)

KEY FINDINGS Position of third sector providers Isomorphic Pressures Creaming and Parking Resource squeeze

Key findings TSO role and experience? Third sector squeeze? Flows of clients – what was happening? ‘Creaming and Parking’ Resource constraints

Key Findings 1 Sector is not the only, or even the most important, determinant of experience – Organisational size, supply chain position, the strategy and management practice of their Prime contractor and location all shape the role subcontractors play. Position in the supply chain is key. – Tier 1 end to end provision generally offers greater contractual certainty over client flows and higher numbers of referrals. Many tier 2 specialist subcontractors have received no or only very small numbers of referrals.

Key findings 2 Client flows – very complex issue – Early days? Issues with health related benefits flows; extremes of flows – peaks and troughs and geographical variations – lack of referrals to tier 2 subcontractors primarily a resource issue – under-resourced Programme? – But customers with needs may be being ‘parked’ widespread perceptions of creaming and parking – In many ways can be seen as embedded - providers saw it as a rational response to Payment by Results (PbR)

The financial stresses that the Programme is under creates doubt about the quality of services being delivered, particularly to those furthest from the labour market

Barriers to innovation Evidence of convergence of approach…(isomorphism) Powerful isomorphic pressures: – Funding model drives everything – Risk aversion and Prime management practices highly prescriptive Disruption, suspicion and mistrust arising from (perception) of payment model: – Hinders local partnership and networking – Traditional source of specialist provider comparative advantage and social innovation

Isomorphic pressures on organisations 1 There is a trend to organisational isomorphism: Competitive isomorphism (but, quasi-market) Institutional isomorphism – Coercive – Mimetic – Normative 2 There are deviations and resistance to organizational isomorphism: Differences in local external environment (e.g. allowing an organisation to resist resource dependencies; ie having reserves?) Organizational resistance to intitutional pressures towards isomorphism (e.g. ‘mission’)

METHODOLOGICAL CHALLENGES AND LIMITATIONS Sampling and case study selection Engagement with Primes Engagement with subcontractors - the ‘gagging clause’ issue

What we did Scoping interviews with national figures, and early interviews with local Primes Phone survey in 2 CPAs, contacted majority of subs, range of contact incl. brief ‘interviews’ Recruit attendees at focus groups (2 in 1 CPA) Case studies (interviews) with those and other subs Follow up short interviews where possible

Issues Phone survey – Inaccurate DWP list (early 2012) – Getting through to right people – Subs lack knowledge, no contract Primes – Vary: some happy to engage, others extremely wary (media controv) – PR opportunity for some? Subs – Prevented from engaging by primes? – Very busy/under pressure – Geographical variation – rural/urban split

Limitations: observations Drop off between contact-FGs-case study recruitment Prime communication with subs? Motivation to be involved – contentment v.s. disgruntlement Unwillingness to be followed up Impact of reporting of research? Plus: general limitations of qualitative research: perceptions; views; misinformation; emotion

Implications for research Research design – Only two CPAs (exceptional?) – Qualitative research – based on access to participants and perceptions, reported info Sampling hampered by: – Incomplete / inaccurate data – Permission/ access TSOs more likely to take part, private sector less in particular less willing? Rural – urban split in our research

INFLUENCING POLICY? Engaging with DWP Critical stance A third sector perspective?

Some thoughts New era of impact measurement, payment by results, accurate definition of outcomes Desire for systematic evaluation How does ‘critical’ social policy analysis fit with this? Funding of research – Independence – Triangulation / confirmation of others

Outputs Working/briefing paper 92. tsrc.ac.uk Creaming and Parking, Social Policy and Administration Third Sector role in WP, Policy and Politics? Further papers on: – Isomorphism – Discourses of distinctiveness

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