16 November 2007
Private contractors providing welfare services could be subjected to a ratings system similar to that used for councils and NHS trusts, under government plans to tackle unemployment and poverty.
Public Finance has discovered that the team behind one of the City Strategy Pathfinder projects in London, which will trial personalised jobseekers services, plans to rate contractors. This is to ensure they meet targets for getting unemployed people into long-term work.
The West London CSP will base its system on a framework being developed by the government's Jobcentre Plus agency and the Learning and Skills Council, which suggests that the initiative could be extended nationwide.
Louise Woodford, programme director at the London Development Agency, which is overseeing CSPs in the capital, told PF: 'We're looking at a performance rating for [welfare] providers in west London, which will build on the tools being developed by Jobcentre Plus and the LSC.
'We will look at bringing in other agencies so that we get a common, comparable rating for all agencies involved. The idea is that we can understand who is performing well and who isn't.'
Asked if the system would be similar to the Audit Commission's star ratings regime for councils, Woodford added: 'That's exactly what it could look like.'
Alongside the introduction of ratings for private care homes next spring, to be overseen by the Commission for Social Care Inspection, this would be the first attempt to grade private and voluntary sector providers delivering outsourced public services.
It could also placate some opponents of welfare privatisation by making contractors' performances public. Critics claim that government plans to use private and voluntary sector bodies could turn jobseeker, advisory and training services into a box-ticking exercise that fails to prioritise sustainable employment. They fear that contractors would cherry-pick the easiest groups to employ.
The LDA has oversight of two London CSPs: West London Working and East & Southeast London. The west London project includes a board of local employers, such as the British Airports Authority and KPMG, advising six local councils and their partners on the skills needed to sustain work locally.
The CSP contracts will then require service providers to meet targets linked to those requirements.
Until recently, businesses delivering public services have rejected strict public monitoring. But Woodford said that initial feedback from potential contractors had been 'positive'. She said that the aim was 'to build a trusted network of branded providers'.
The Department for Work and Pensions is supporting 15 CSPs – including projects in Glasgow, Liverpool and Manchester – and has made local Deprived Area Fund cash available to support projects.
A DWP spokesman said the CSP 'recognises that solutions to tackling worklessness are often better devised locally'.
But the two CSPs in London face severe challenges and will be viewed as litmus tests for the personalised welfare provision supported by Work and Pensions Secretary Peter Hain.
The east London CSP, which will operate across five local authorities, contains 100,000 people with no formal qualifications or skills and 60% of those unemployed in the area are from ethnic minorities.
There are also significant minority populations in the west London scheme, covering Hounslow, Hillingdon, Brent, Ealing and Hammersmith & Fulham. The London CSP
areas contain more than 560,000 unemployed people.
Consequently, London has been given an additional £11.4m to fund specific programmes, such as language skills for ethnic minority populations.
As well as experimenting with City Strategies, the government plans to extend the privatisation of welfare services through regional contracts, allowing firms and voluntary bodies to provide jobseeker, training and rehabilitation services, as well as support for the newly employed.
But the Public and Commercial Services union, which represents Jobcentre Plus staff and has opposed privatisation, said the London blueprint was a 'gimmick'.
A spokesman said: 'Ratings for contractors are flawed… In projects where service provision is effectively monopolistic, it's not going to address the fundamental question of what you do with a failing contractor.'
PFnov2007
