Working paper 92, February 2013

Does sector matter? Understanding the experiences of providers in the Work Programme

The Work Programme was lauded by the Employment Minister as a ‘triumph’ for the Big Society because of the widespread involvement of the third sector in its delivery. Yet concerns about the sector’s role and its perceived marginalisation in such large-scale high-risk contracts have dogged the Programme. This paper explores the experiences of different providers in the Work Programme, asking what, if anything, is distinctive about the experiences of third sector organisations (TSOs). It draws on interviews with key informants and subcontractors from all sectors to explore issues around the squeezing out of third sector organisations, low flows of clients to subcontractors and the ‘creaming and parking’ of hard to help customers.

Key findings

• Sector is not the most important factor in accounting for providers’ experiences of the Work Programme. 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.
• The lack of referrals to tier 2 subcontractors appears to be a function of an under resourced programme, as well as doubts that as many clients in the health related benefit groups are entering the Programme as expected.
• It also implies that customers with specific needs may be being ‘parked’.
• Gaming – including creaming and parking – appears to be embedded in the Work Programme. Many 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.