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Promises and Pitfalls in the Work Programme's Private Power Market

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Promises and Pitfalls in the Work Programme's Private Power Market Making Markets in Employment Support: Promises and Pitfalls in the Work Programme’s Private Power Market Eleanor Carter Department of Geography June 2018 Submitted in partial fulfilment of the degree of Doctor of Philosophy Acknowledgements The heartiest of thanks go firstly to Adam Whitworth. The time, thought and effort that Adam has dedicated to both me and this PhD project have been immense and I am hugely grateful for his support. From my first inklings of interest in undertaking doctoral research Adam has been a tremendous source of encouragement and advice. I owe Adam a deep intellectual debt: his insights have been crucial in helping me work through ideas and approaches. Beyond this, Adam’s persistent backing and reassurance has been a crucial underpinning to a new-found confidence in my own ideas and abilities. My second supervisor Dan Vickers also played a formative role in sharpening my analytical skills. I am grateful for the support of other friends and colleagues across the Geography Department at the University of Sheffield and DWP teams based at Rockingham House. I would also like to thank the Economic and Social Research Council who funded the project through an advanced quantitative methods studentship. I owe much to my friends and family. My parents in particular are key culprits in nurturing my inquisitiveness and determination. Thank you for your generosity, support, and care. Thanks also to my sister Rosie, who has reminded me throughout that it is important to have fun and who has provided plenty of entertaining distractions. Finally, to Mark McCombs whose quiet and sturdy support I have cherished through it all. Thank you. 3 Abstract Welfare-to-work services have been a key area of experimentation in quasi-marketised public service delivery. The British flagship Work Programme is seen as an international pioneer in its reliance on outsourcing, payment by results and provider flexibility allied to promises of innovation and performance improvement. Within schemes dominated by such marketised accountabilities there are well-known risks and tensions around creaming, parking and churning. International literature equally makes clear that the design specificities of programme governance and accountabilities can play a key role in either facilitating or buttressing against these negative provider practices. In this context, the overarching question which animates this thesis is whether this crafted Work Programme design structure is sufficient and appropriate to steer its quasi-marketised providers to the achievement of the full suite of government policy objectives. Unprecedented academic access to the commissioning Department’s administrative datasets alongside sophisticated and conceptually tailored multivariate quantitative analyses underpin the thesis’ empirical contributions. The analysis is framed by an original multi-dimensional analytical framework articulating multiple potential alternative types of quasi-markets. This conceptually broad and empirically focused study provides a rare opportunity to trace outcomes directly from the plans and promises of a particularly bold quasi-market experiment and to consider the ways in which key design elements cascade through to, and are detectable in, the patterning of employment and earning outcomes of programme participants on the ground. The empirical analyses highlight myriad ways in which Work Programme promises end up in performance pitfalls despite, if not because of, its particular variety of quasi- marketised governance. 4 Table of Contents Acknowledgements ............................................................................................. 3 Abstract ................................................................................................................ 4 1 Introduction: making markets in employment support ...................................... 21 1.1 Fracturing the understanding of marketisation in public services ............. 22 1.2 British welfare-to-work in context ............................................................. 23 1.3 The Work Programme ................................................................................ 25 1.4 Perennial risks and hubristic design promises: the research focus and chapter summaries .............................................................................................................. 26 2 Making (quasi) markets in the welfare state ...................................................... 31 2.1 Chapter summary ....................................................................................... 31 2.2 Shifting modes of governance in public service delivery .......................... 31 2.3 Governance as a grounding concept .......................................................... 33 2.4 The rise and rise of market governance and accountabilities .................... 37 2.4.1 Public service markets as ‘quasi’-markets ......................................... 39 2.5 Fronting and fracturing understandings of market governance: the difference thesis 40 2.6 A differential view of markets ................................................................... 42 2.6.1 Dimensions of variation in public service quasi-markets – allocation 44 2.6.2 Dimensions of variation in public service quasi-markets – production 45 2.7 Varieties of quasi-market: where non-market accountabilities overlay marketised governance ........................................................................................... 47 2.8 Network accountabilities – the missing dimension .................................... 49 2.9 Conclusions and charting a course to operationalise the analytical framework .............................................................................................................. 51 3 Evolution of the “welfare-to-work” agenda: shifting policy goal posts and applying new quasi-market approaches ..................................................................... 54 3.1 Chapter summary ....................................................................................... 54 3.2 Policy trends in unemployment and “worklessness” ................................. 54 3.3 The activation turn ..................................................................................... 56 3.4 Beneath the banner of activation ................................................................ 57 3.5 British activation objectives ....................................................................... 58 3.6 Carrots, sticks, or a bit of both? Activation trends and the rise of ‘welfare- to-work’ in the UK ................................................................................................. 60 3.7 Era 1: Tory beginnings (1989 – 1997) ....................................................... 61 3.8 Era 2: New Labour’s Third Way (1997 – 2010): ‘creeping conditionality’ and quasi-markets ................................................................................................... 61 3.9 Era 3: Conservative rocket boosters (2010 – 2018): enter the Work Programme ............................................................................................................. 70 3.9.1 Introducing the Work Programme ...................................................... 70 3.9.2 The particularities of the quasi-market configuration embodied by the Work Programme: the allocation dimension ...................................................... 72 3.9.3 The particularities of the quasi-market configuration embodied by the Work Programme: production dimension .......................................................... 74 3.10 Work Programme as a private power market and anticipated challenges for this quasi-market form ........................................................................................... 76 3.11 Work Programme design as a moderator of gaming? ................................ 77 3.11.1 Work Programme design innovations: Differential payment groups . 82 3.11.2 Work Programme design innovations: Large, regional contracting areas with specified minimum performance levels and market share shift ................. 83 3.11.3 Work Programme design innovations: Sustainment payments for longer-term employment .................................................................................... 84 3.12 Are these bold design promises kept? ........................................................ 85 4 Data and Methods ............................................................................................... 90 4.1 Chapter summary ....................................................................................... 90 4.2 Introduction to the research approach ........................................................ 90 4.3 Introduction to underlying datasets – an exciting in-house opportunity .... 93 6 4.3.1 National Benefits Database (NBD) .................................................... 94 4.3.2 Work Programme Analytical Database (WPAD) .............................. 95 4.3.3 Labour Market System (LMS) meetings, opportunities, and ‘client’ characteristics ..................................................................................................... 95 4.3.4 P45/6 Employment data ..................................................................... 96 4.3.5 Additional datasets capturing employment and earnings – Real Time Information sample ............................................................................................ 97 4.3.6 Additional external datasets to capture
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