Devolved Employability Programmes: A third sector critique

Devolved Employability Programmes: A third sector critique SCVO briefing | 25 May 2017 View the report as a PDF - SCVO - Employability Landscape Critique May 2017 Our position The decision to adopt a single contract with each CPA has minimised the involvement of small and medium-sized third sector organisations The time afforded to the procurement process is not sufficient for the formation of consortia and actively militates in favour of large organisations and current sub-contractors The commissioning process has been overly complex and entirely inaccessible for many organisations. The continued emphasis on job outcomes is not conducive to a focus on disadvantaged groups and those furthest from the labour market. Payment by results will also continue to cause problems for small providers at the front of the pipeline The commissioning process for Fair Start Scotland has missed an important opportunity to explore the concept of person centred services Briefing in detail SCVO welcomes the devolution of employability support to Scotland. However, it would have been preferable if welfare and employability were devolved in full, both for simplicity and to enable Scotland to adopt an entirely different approach. Nevertheless, we are encouraged by the stated ambitions of the programmes, primarily the involvement of the third sector and a focus on those furthest from the labour market. The third sector holds a variety of expertise and experience in employability support and it is positive that this has been recognised.  Our sector has expressed some concerns about the administrative and contracting processes. We recognise that time pressures, restrictive budgets and the need for capacity building within Scottish Government posed issues when designing the new employability programmes. Nevertheless, the sector is disappointed with the approach in the interim period and there are fears that these issues have the potential to undermine the ambitions of the Scottish Government and our sector’s involvement.  SCVO recently held a stakeholder engagement event with third sector organisations who would be looking to be involved in the new employability programmes, either as a lead contractor or sub-contractor. The discussion was focused on how we can facilitate third sector involvement in the new Fair Start Scotland programme. The event was successful in connecting prospective lead contractors to smaller, specialist providers. However, it also flagged a number of ongoing issues with the administrative process. This discussion and other conversations with our sector form the basis of this discussion paper. That the initial contracts are for a three year period gives scope to incorporate the sector’s concerns in subsequent design and tendering processes. We would like to outline some of the sector’s concerns and give consideration as to how Scottish Government can ensure they get the best out of the third sector, and indeed individuals in Scotland. Rather than retrospectively assessing what should have been done at various steps in this process, we'd like to look to the future in the hope that this learning can be utilised and implemented in subsequent arrangements. Engaging with the third sector There are concerns that the problems experienced by small organisations under the Work Programme and Work Choice will remerge within the devolved employability programmes. Despite a desire to be involved, small organisations were squeezed out within the previous system. While the decision to adopt nine contact package areas is welcomed, particularly as this marks a significant improvement from the arrangements of the interim programmes, the decision to have a single large contract in each defined area is problematic for small and medium sized third sector organisations. Particular issues expressed by our sector have been:

• Small/medium sized organisations will not be able to lead a bid and thus will be reliant on becoming part of a consortia, or even a sub-consortia.
• The process of finding, and then completing, expressions of interest forms has been time-consuming, especially since these forms are not standardised.
• It is important that the process does not lead to consortia based on who you know or merely previous experience of partnership working. Under present conditions, this is a real threat.
• While it was not the intention of these programmes, it is clear that something of a supply-chain is emerging.
• In future, there should be proactive efforts and support to enable smaller organisations to become involved and indeed to widen existing consortia. It would also be welcome if time was given to analysing whether a single large contract area is necessary.

It is unclear whether it will be possible for charities to become involved in the process in terms of providing specialised services on a case-by-case basis. This would most probably involve the third sector organisations ‘charging’ for their services, perhaps facilitated through a ‘specialised’ budget allocated as part of the contracting process. In the immediate term, this would be a good way to involve small, specialised organisations while also ensuring personalised services. However, a longer-term goal would be movement away from a single large contract thus enabling organisations to have greater control over who receives support, and how.  Procurement The relatively short length of time allocated to the procurement process actively militates in favour of large organizations and current sub-contractors. There appears to have been very little consideration given to the time it takes to form consortiums, to understand the complex financial modelling and then apply through the procurement process. These resource and capacity implications are particularly severe for smaller organisations. Colleagues at SCVO and organisations attending our stakeholder event noted how time consuming, complex and confusing the procurement process has been. Merely getting to the stage of downloading the application to tender has proven extremely difficult. This throws up serious questions of accessibility and inclusiveness. Other considerations relating to procurement are:

• The procurement process is also considerably less-generous than the time allocated to the assessment of applications.
• We note that the evaluation process for the interim programmes have been agreed, however this will come too late to inform the post-2018 programme which is somewhat disappointing.
• Learning from the on-going procurement process should most definitely be taken seriously and Scottish Government should make a consorted effort to reach out to both successful and unsuccessful applicants to gather their views on the process and thus ensure that future processes are more efficient.

Job outcomes The weighting of payments remains firmly on sustained job outcomes, marking very little change from the previous programmes. There is nothing allocated to progress, meaning that small providers at the front-end of the employability pathway could be left waiting for payment for an unsustainable amount of time. Although the up-front-service fee will assist in this area, it will not be enough to enable the involvement of small organisations who are often working on very tight financial margins.  It is also difficult to see how such a focus will promote a more inclusive approach and discourage the so-called ‘creaming and parking’ witnessed in the previous system. Sustained job outcomes remaining the focus may lead to providers continuing to prioritise ‘low-hanging fruit’, meaning those with complex barriers to employment may not see considerable improvements in their experience of support or personal employability. Such approaches are blind to the current state of the labour market and that the fact that the labour market is a fluid entity and is thus open to economic, structural and technological change.  Payment by progression appears to be a positive means of supporting those furthest from the labour market and encouraging providers to provide intensive support for such individuals. We would welcome analysis of how this could work in Scotland. A focus on the hardest to reach necessitates a more nuanced approach through payment by progression. Individuals from target, hardest to reach groups do not necessarily progress in a linear fashion and thus their progression is not aligned with simplistic job outcome models. The individuals that our sector works with often have complex barriers to employment which means writing a CV, achieving a job interview or work placement will all be important progressions. We would be happy to connect Scottish Government to third sector organisations utilising progression as a key thread in their employability support. We believe that small providers at the front of the pipeline should be rewarded for the time and dedication that working with vulnerable individuals and those with barriers to employment requires and that these small providers should not be left waiting for long period without payment. In future contracts, this should be a key consideration. It would be even more positive to abandon such payment models entirely. Employability is the only policy sphere in which payment by results is central, with no similar approach adopted in other areas such as social care, education or apprenticeships. Alternative payment approaches could promote better results and would also enable smaller organisations to provide support, who would be unable to operate on a small up-front service fee alone. It could be worth exploring the potential for individual budgets allocated by and assessed upon distance from the labour market or assessing the performance of providers based upon the experience of individuals using services. SCVO would be happy to facilitate discussions on such innovative approaches.  Employability programmes are a vital service, enabling inclusive labour markets, independent living and realisation of personal potential. Due to the nature of this service, we do not believe that there should be the potential for private profit within the system. Private profit ultimately encourages creaming and parking. We believe that the approach taken within the social security system, whereby private companies have no role within the system, should be replicated within employability. Employability and social security are interlinked and should therefore be operated on aligned principles.  Although not to the same extent witnessed under the previous programmes, the customer journeys remain very prescriptive which gives providers very little room to innovate or to design support around an individual. It will also be easier to meet programme commitments for some individuals and in certain geographical areas. For example, three hours of face-to-face contact per week will be more difficult to achieve in some of Scotland’s more rural areas and if this leads to a reliance of digital and IT, this could again exclude some individuals who are not technologically literate. Some of the most successful skills and jobs programmes are those which are flexible and innovative. Perhaps flexibility could be a key principle in subsequent contracts and programmes.  Linkages There also needs to be linkages between what is already happening in the employability sphere, particularly for vulnerable and target groups. In this respect, we welcome Scottish Government’s intentions to conduct a mapping exercise of the employability pipeline. This exercise will enable the maximisation of funding and streamlining of support. SCVO would be happy to be involved in this exercise and to connect Scottish Government with the relevant third sector organisations. Recommendations  In light of the views of our members, we believe there needs to be changes at the policy level and in practical application within future programmes and procurement processes. In particular, we would recommend: 

• If a renewed focus on disadvantaged groups is to be successful, there must be a move away from over-simplistic ‘payment by results’ models which recognise success purely in the form of sustained job outcomes.
• The procurement system needs to be more straightforward and accessible. Overlycomplex online systems are shutting third sector organisations out of the process.
• We recommend that the Scottish Government has real engagement with both successful and unsuccessful applicants to the tendering process. This feedback should form the basis of the process within the next round of contracts.
• Within the next round of contracts, there should be a movement away from single large contracts in each CPA. The current contracts preference large providers and undermine personalised, responsive support.
• Scottish Government and providers must actively seek the views of those receiving employability support. Those receiving support have the most important voice within this system and programmes should be run on the principles of co-production, collaboration and personalisation, as outlined in the Christie Commission.

Conclusion   The third sector in Scotland welcomes the ambitions promoted by Scottish Government and we hope that devolution changes the experience of those receiving employability support – promoting wellbeing, dignity and respect. However, we are concerned that some of the administrative details may undermine these ambitions. We hope that the Scottish Government will consider the points outlined in this paper both now and as it comes to considering the contract and tendering process for the next round of contracts. Reflecting whether changes can be made to promote third sector involvement and support for those furthest from the labour market will ensure responsive programmes. About us The Scottish Council for Voluntary Organisations (SCVO) is the national body representing the third sector. There are over 45,000 voluntary organisations in Scotland involving around 138,000 paid staff and approximately 1.3 million volunteers. The sector manages an income of £4.9 billion.  We work to the following mission: To support people to take voluntary action to help themselves and others, and to bring about social change. We have over 1,600 members who range from individuals and grassroots groups, to Scotland-wide organisations and intermediary bodies. As the only inclusive representative umbrella organisation for the sector SCVO: 

• has the largest Scotland-wide membership from the sector – our 1,600 members include charities, community groups, social enterprises and voluntary organisations of all shapes and sizes
• our governance and membership structures are democratic and accountable - with an elected board and policy committee from the sector, we are managed by the sector, for the sector
• brings together organisations and networks connecting across the whole of Scotland
• SCVO works to support people to take voluntary action to help themselves and others, and to bring about social change.

Contact Ruth Boyle Policy Officer   Scottish Council for Voluntary Organisations, Mansfield Traquair Centre,  15 Mansfield Place, Edinburgh EH3 6BB  Email: ruth.boyle@scvo.scot Tel: 0141 465 7532  Web: www.scvo.scot