Work Programme evaluation: Operation of the commissioning model, finance and programme delivery December 2014 Research Report No 893 A report of research carried out by the Centre for Economic and Social Inclusion, the National Institute of Economic and Social Research, the Institute for Employment Studies and the Social Policy Research Unit at the University of York on behalf of the Department for Work and Pensions. © Crown copyright 2014. You may re-use this information (not including logos) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit http://www.nationalarchives.gov.uk/doc/open-Government-licence/ or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: [email protected]. This document/publication is also available on our website at: https://www.gov.uk/Government/organisations/department-for-work-pensions/about/ research#research-publications If you would like to know more about DWP research, please email: [email protected] First published 2014. ISBN 978 1 910219 66 9 Views expressed in this report are not necessarily those of the Department for Work and Pensions or any other Government Department. Work Programme evaluation: Operation of the commissioning model, finance and programme delivery Summary This report brings together and summarises the main evidence from: • the 2013 and 2014 waves of the Work Programme evaluation about the commissioning model, finance and programme delivery; and • provider surveys from 2012, 2013 and 2014. The report explores the impact of the commissioning model on the provider market, the operation of the financial model and programme delivery. The report draws on: • qualitative interviews, conducted in 2013 and 2014, with Work Programme prime providers, selected subcontractors and DWP and Jobcentre Plus staff; • national surveys of providers; and • an analysis of Work Programme provider market data. The Department for Work and Pensions (DWP) will use the results from this report in the continuous improvement of the Work Programme and the design of any future contracts. The preface notes at the start of the report give an update of the DWP’s response to the research findings. 3 Work Programme evaluation: Operation of the commissioning model, finance and programme delivery Contents Acknowledgements ............................................................................................................... 17 The Authors ........................................................................................................................... 18 Glossary of terms .................................................................................................................. 20 List of abbreviations............................................................................................................... 23 DWP preface notes ............................................................................................................... 25 Executive summary ............................................................................................................... 29 Part 1 Introduction Coverage of this report and methods .............................................................................. 38 Report structure ............................................................................................................... 39 1 The Work Programme ..................................................................................................... 40 1.1 A new model for welfare-to-work ........................................................................... 40 1.2 The commissioning model ..................................................................................... 41 1.3 Programme delivery and service design ............................................................... 42 1.3.1 Who participates in the Work Programme? ............................................ 42 1.3.2 What do providers offer participants? ..................................................... 43 1.3.3 How do claimants enter the Work Programme? ..................................... 43 1.3.4 How long do participants stay on the programme? ................................ 43 1.3.5 Who are the Work Programme providers? ............................................. 44 2 The evaluation of the Work Programme .......................................................................... 45 2.1 About the evaluation .............................................................................................. 45 2.2 The commissioning model evaluation ................................................................... 46 2.3 The programme delivery evaluation ...................................................................... 48 2.3.1 Provider research.................................................................................... 48 2.3.2 Participant research ................................................................................ 49 2.4 Measuring outcomes and impact .......................................................................... 49 2.5 Locating the evaluation within existing evidence ................................................... 49 4 Work Programme evaluation: Operation of the commissioning model, finance and programme delivery Part 2 The Commissioning Model 3 Market structure ............................................................................................................... 52 3.1 Prime providers, supply chains and third sector organisations ............................. 52 3.2 Current provider market and high-level changes in the last year .......................... 53 3.3 Provider market concentration .............................................................................. 55 3.3.1 Prime provider market concentration ...................................................... 55 3.3.2 Changes in prime provider market concentration ................................... 56 3.3.3 Market concentration including subcontractors ...................................... 58 3.3.4 National market concentration including prime and T1 subcontractor delivery ............................................................................. 59 3.3.5 Effects of supply chain concentration changes at CPA level .................. 64 3.3.6 Prime providers driving changes in market concentration ...................... 66 Figure 3.1 Degrees of change in the concentration of CPA markets 2011 to 14 ............... 67 3.4 Changes to supply chains in the last year ............................................................. 68 3.5 Characteristics of Work Programme subcontractors and providers ...................... 70 3.6 Subcontracting to more than one prime provider in a CPA ................................... 75 3.7 Outsourcing by programme providers ................................................................... 76 3.7.1 Signposting participants to support outside supply chains ..................... 81 3.8 Variations in supply chain design .......................................................................... 83 3.8.1 Development of the model ...................................................................... 83 3.8.2 Primarily in-house, low competition delivery ........................................... 85 3.8.3 Primarily outsourced, high competition delivery...................................... 87 3.8.4 Primarily outsourced, low competition delivery ....................................... 89 3.8.5 Primarily in-house, high competition delivery.......................................... 90 3.9 Summary ............................................................................................................... 92 4 Operation of the commissioning model: contract and performance management .......... 94 4.1 DWP contract and performance management ...................................................... 94 4.1.1 Contract and performance management roles ....................................... 95 4.1.2 Performance measurement by DWP ...................................................... 97 4.1.3 Management of performance by DWP .................................................... 97 4.1.4 Management of contract compliance by DWP ...................................... 100 5 Work Programme evaluation: Operation of the commissioning model, finance and programme delivery 4.1.5 Management of quality by DWP ........................................................... 100 4.1.6 Black box contracting and performance management by DWP ........... 101 4.2 Prime provider views and experiences of DWP management ............................ 101 4.2.1 Provider views of DWP market share shift ............................................ 103 4.2.2 Provider views on contract termination ................................................. 104 4.3 Supply chain management .................................................................................. 105 4.3.1 Performance management by prime providers ..................................... 105 4.3.2 Black box contracting and performance management by prime providers ................................................................................ 106 4.3.3 Competition and collaboration in supply chains .................................... 107 4.3.4 Subcontractor views and experiences of performance management ....110 4.3.5 Management of non-end-to-end providers ............................................112 4.4 Providers’