Wednesday, 25 March 2009

Welcome to this week's e-bulletin. We have an event coming up in Newcastle so please make note of the date in your calendars.

CSP Workshop: Targeted Recruitment and Training for Social Landlords
Royal Station Hotel, Newcastle
23rd April 2009, 12-3:30pm

Email Mark Morrin for more details or call 020 7253 6289.

If you think there are others who would like to receive this bulletin or you have a relevant news item you'd like to share, please contact Andy Myers.

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The illusion of choice: lessons from contracting out welfare to work in Australia.

By Emily Crawford
Australia has been a leader in contracting out its welfare to work provision, with the introduction of the Job Network in 1998. Like Flexible New Deal, the Job Network was a ‘managed’ market for the provision of subsidised employment services. It was guided by three principles:

• a strong focus on outcomes – better quality assistance leading to more sustainable employment outcomes;
• addressing the structural weaknesses and inefficiencies by changing the role of government to purchaser rather than provider; and,
• the use of competition to drive greater efficiency for the taxpayer and increased choice for consumers.

Job Network was revised and reshaped several times to overcome some perverse incentives – largely around creaming and parking – yet the promised focus on user choice and personalisation remained unfulfilled throughout Job Network’s 10 year life. Looking at why this was the case raises some questions for the FND model and offers some insights into lessons to be learnt from Australia’s example. 

In the Job Network model, several providers operated in each district and clients nominated their preferred provider at their initial assessment with the government agency Centrelink. In large part the lack of genuine user choice in Job Network was due to a systemic failure to provide service users with sufficient detailed information to make an informed decision.

“A sheet of providers’ names with street address and generic description of services is insufficient to make an informed choice”. (ref.)
National Employment Services Association

An early evaluation of the Network found that only a ‘tiny minority of job seekers self select and that Centrelink automatically refers the giant majority of job seekers to Job Network providers on a random basis’. (ref.) A National Audit Office report found that information for job seekers was:

“variable, often poor, and did not meet minimum requirements… information seminars were not conducted prior to the job seeker making a choice of their [provider], and some job seekers did not attend a seminar at all”.

And the situation did not improve over time. Last year the Australian Council of Social Service commented that “information is not systematically provided to jobseekers about the services and performance of local providers, and there is little time for them to choose a provider after they claim income support”. (ref.)

The star rating system was meant to help service users choose their provider. Commentary suggests, however, that star ratings were used as a device for contract renewal, rather than as a measure to assist job seekers make choices between competing providers in their local area.

In response to these and other criticisms, the new Labour Government reviewed Job Network last year. One of the key issues that the review aimed to tackle was that:

“Job seekers can only choose their provider upon initial registration, a point in time that they may have little or no information about the provider. The current system imposes restrictions on the ability to change employment service providers after that time”. (ref.)

In the FND model, client choice will be possible from 2010 in ten of the 14 areas – those served by two prime contractors – and market share can be reallocated to accommodate that choice. Learning from the Australian experience, this immediately raises the issue of how to ensure JCP advisors provide sufficient information of sufficient detail to allow clients to make an informed and positive choice. Pathways to Work and Employment Zones incorporated elements of client choice and could provide important lessons on provision of information in a UK-based employment context.

However, there is still the question of individual choice of sub-contractor. Given that some primes may not directly deliver services at all, it is important that the day to day relationship between clients and sub-contractors is the right fit for the individual.

This raises the third key lesson from Australia. The development of a star ratings system that is sensitive to customer feedback all the way down the sub-contracting chain will be an important element in clients being empowered to make an informed and positive choice.

Click here to email your comments/responses to Emily Crawford

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