This document summarizes a research project exploring the role of the third sector in employment services in the UK. It finds that contracting out employment services has evolved over three waves of policy development since the 2000s. While third sector involvement was intended to be significant under the new Work Programme model launched in 2011, some issues have been raised about a potential "squeeze" of the third sector due to pricing pressures. The proposed research aims to understand the experiences of third sector providers under the Work Programme, whether their approach differs from other providers, and stakeholders' views on the value of third sector involvement in employment services. Qualitative research methods like interviews and case studies of employment service providers are outlined.

1. Exploring the role of the third
sector in commissioned
employment services
Knowledge to date and questions for
research
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2. What are employment services?
• CV writing, interview training, action plans etc
• Emphasis is on interventions to move people into
work as quickly as possible, rather than longer term
training
Basic model of employment services
DWP
Contract
Payment
Referral from Provider
jobcentre ‘Job outcome’
Unemployed Employment Services New job

3. Why an evidence review?
• Provide an accessible introduction and a
narrative of the policy developments over the
last 15 years
• Locate and evaluate the existing evidence
• Outline of the main areas of controversy and
gaps in our knowledge

4. Findings one: three waves of policy
development in employment services
• Wave one:
– Pilots and trials of contracting services, flexibility for providers, some
payment by results
• Wave two:
– Proliferation of contracted services, expansion to new customer
groups, more payment by results
• Wave three:
– Commissioning and payment by results becomes the accepted model
of delivery
– 2008 Commissioning strategy commits DWP to contracting to a few
‘prime providers’ who are expected to subcontract

5. Major themes within the literature
• A third sector ‘squeeze’
• Potentially unfair relationships
• The hardest to help customers

6. Gaps in our knowledge
• Basic information about third sector provision
• Independent research evidence showing what
is distinctive about third sector delivery
• The extent to which controversies are well
founded, and the impact of attempted
solutions

7. Work Programme revolutionary?
• Continuity with contracted out approaches
under New Labour: FND, Pathways, EZs
• Prime model, conditionality, differential
payments, DEL-AME switch were all emerging
• Work Programme goes further: 1 Programme
for all ‘customer groups’, national rollout
• Primes bring supply chain management
expertise and financial scale
• Sub-contractors come from all sectors

8. 18 Contract Package Areas covering UK, 40
contracts
18 Prime contractors (2 TSO, 1 Statutory)
Prime Contractor
Degree of referrals retained
or passed to subs varies greatly
Direct Delivery
Referrals
from JC+ Estimated 19% delivered
End to end by TSOs (vs 30% rhetoric)
provider
(tier 1)
Partnership?
Specialist provider
(tier 2)
Delivery / Job Outcomes

9. Issue raised within sector
• Upheaval, complexity and uncertainty
– Getting on Framework, intensive bidding requirements
– Losing out in one CPA, moving to another
• Squeezing out the third sector
– Price discounting
– Contracts/referrals not forthcoming … window dressing?
– TUPE concerns
• Payment by Results
– Payment model too risky for TSOs (esp niche)
– Creaming and Parking within customer groups
• Merlin Standard

10. Researching the Work Programme
• Inclusion/Social Market Foundation
Forecasting/viability studies (ss 2011)
• ACEVO – survey of third sector subcontractors
(October 2011 )
• NAO – Value for money (December 2011)
• DWP evaluation – consortium led by IES
(spring 2012)
• TSRC - comparative and case study research
(spring and summer 2012)

11. 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?

12. Proposed methodology
• Focus on 2 CPAs selected to capture different
supply chain models
• Stakeholder interviews with sector and w2w
infrastructure, Primes, DWP – Nov/Dec 2011
• Subcontractor focus groups – providers from
all sectors in a supply chain – Jan/Feb 2012
• Subcontractors case studies – all sectors
Feb/march 2012

13. Likely implications for policy
• Are the complaints made by the sector valid?
• Is the work programme functioning as
intended? Does it need altering in order to
succeed?
• What if anything does the third sector
contribute that is different to providers in
other sectors?
• Do we need to learn a lot more about
experience of clients?

14. j.rees@tsrc.ac.uk
r.taylor@tsrc.ac.uk
dammx@hotmail.co.uk
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Hosted by: