Special Interest Group for Work Programme Sub-contractors
NCVO's Special Interest Group (SIG) for Work Programme sub-contractors represents voluntary and community organisations involved in the Government’s new welfare-to-work initiative. The group enables sub-contractors to share their experiences; provides them with information and advice; and enables NCVO to feed their concerns to Government.
The group is free and open to all voluntary and community organisations who act as sub-contractors in the Work Programme. Membership currently stands at around 150 Civil Society organisations and growing.
Join the group
To join the free group and have your say simply complete the short online registration form.
Find out more
- Latest news
- Aims of the group and how it works
- Some initial concerns from Civil Society organsiations
- Information for Civil Society sub-contractors
Work Programme charities warn of imminent contract failures, October 2012
7 out of 10 charity sub-contractors say that their Work Programme contracts are at risk of failure in an NCVO report released on 4 October 2012.
Our report found that 47% of respondents felt that their contacts were at risk of failure within the next six months and 26% thought they were at risk of failure before the end of the contract.
The report also found that half of the charities (48%) were subsidising the delivery of the Work Programme from their own reserves.
First SIG meeting with Chris Grayling MP, January 2012
The first SIG meeting with Chris Grayling MP was a very useful and constructive affair with those present providing some excellent contributions and suggestions on how the Work Programme might be improved. As we all know, we were never going to re-write the programme in any substantial way, but we did succeed in raising some pertinent issues with the minister which he promised to take on-board: To summarise:
1. He agreed to discuss and overcome the problems around data sharing, so that when referrals come in they are accompanied by the data that the Job Centre collects for claimants.
2. He said he would welcome NCVO’s intervention in a wide cross-government programme of work looking at the whole range of issues in relation to Payment by Results.
3. He recognised the need for contracts to be proportionate to the scale of the activity.
Other issues covered included the need for personalisation of the Work Programme, problems surrounding cash-flow and how these might be overcome by DWP and the need to share good practice (see below). Predictably, there was little movement from the minister on the first two points but he was very supportive of the latter.
SIG survey 2011
In October 2012, 110 members of NCVO’s Special Interest Group (SIG) for Work Programme sub-contractors were surveyed on their experiences of the Work Programme to date. The results of the 72 responses received to the quantitative element of the survey can be viewed here (pdf 951kb). Issues covered include member feelings surrounding current levels of referrals, sub-contractor involvement in the wider commissioning process and perceptions of the Merlin Standard and its efeectiveness in regulating prime contractor behaviour.
The qualitative element of the survey that questioned members on their positive and negative experiences of the Work Programme, and asked for recommendations on how to improve the programme is currently being processed. This information will be used to form a ‘Good Practice guide’ that will be published and circulated throughout the welfare-to-work industry in due course.
Our Special Interest Group for Work Programme group provides an opportunity for sub-contractors to share their thoughts and experiences of the Work Programme, with feedback gathered used to inform NCVO’s welfare-to-work research and policy work.
Using feedback from the group, NCVO has published a report, The Work Programme – Initial Concerns from Civil Society Organisations. Members of the SIG were also given an opportunity to comment on a draft of the paper before it was published and presented to Employment Minister Chris Grayling MP. We will be discussing the concerns raised and recommendations made when we meet with the Minister later this month.
Another essential function of the group is to periodically survey members on their experiences and thoughts of the Work Programme, ensuring future reports and analysis are based on robust evidence, both quantitative and qualitative.
The group convenes three-to-four times annually giving members a chance to address their concerns and questions direct to key stakeholders and other opinion formers. Meetings will also provide members with an opportunity to share their experiences of the Work Programme with other civil society sub-contractors.
Having expressed a personal interest in the group, Employment Minister Chris Grayling MP has agreed to attend our first meeting scheduled for 17 January 2012.
Using feedback from the SIG, NCVO have published a report, The Work Programme - Initial Concerns from Civil Society Organisations. The paper raises concerns that the knowledge and experience of Civil Society Organisations is being seriously under-used through a lack of referrals, unfavourable conditions being imposed, unsustainable prices being offered, and the under-use of the sector's expertise in the wider commissioning process.
It concludes that not only could many Civil Society providers feel squeezed out and financially vulnerable, but that the widespread under-utilisation of the sector seriously reduces the effectiveness of the work programme, potentially leading to widespread failure. Importantly, the paper also raises concerns regarding the Merlin Standard's (see below) effectiveness in addressing many of problems highlighted.
NCVO will be meeting with Employment Minister Chris Grayling MP late October to discuss the concerns raised and recommendations made.
Concerns raised in the report include:
- Too much premium was placed on ‘price’ rather than ‘quality’ during tendering stage.
- There is too much emphasis on using CSOs for service delivery rather than the wider commissioning, design and evaluation process.
- The overly bureaucratic procurement processes adopted by some primes has created a barrier to some sub-contractors entering the Work Programme.
- There are concerns that primes will not pass on sufficient upfront fees to their subcontractor partners, many of whom will be financially vulnerable ‘niche’ providers unable to wait for the delay in payment associated with a PbR system.
- The differential payments model will not prevent ‘creaming and parking’ within customer groups or geographical areas.
- Many tier 2 providers are yet to receive any Work Programme referrals, or in some cases contracts from their prime, reinforcing concerns that some CSOs have been used as ‘bid candy’.
Recommendations made in the report include:
- There should be more transparency in future government commissioning processes to instil confidence that price is not afforded undue priority in tenders.
- DWP should do more to ensure prime contractors engage with their local civil society in the wider commissioning, design and evaluation processes and not just service delivery.
- As recommended by Lord Hodgson’s Red Tape Review, government should ensure that tender documents are proportionate to the size of the contract on offer and PQQs for smaller organisations should in most cases be dispensed with. Information that can be
acquired from accounts, Companies’ House or Charity Commission returns should not be requested from the CSO in question.
- Government should look immediately at current funding arrangements to ensure money passed on to sub-contractors is both fair and sufficient to carry out the work.
- Government should consider underwriting a small proportion of the contract value for CSOs.
- DWP should regularly publish performance data relating to referrals, job outcomes, job sustainment outcomes and payments across a wide range of customer groups including age, race, region, disability, lone parents, homeless and “not in employment, education or training” (NEETs). Not only would this data allow providers to be held to account, it would also help to disseminate good practice throughout the Work Programme.
As part of the DWP approach to commissioning, prime contractors are required to ensure that their sub-contractual relationships adhere to the DWP Code of Conduct through the application of the Merlin Standard.
An organisation that demonstrates this adherence is awarded Merlin status. An organisation which fails to adhere to the Code of Conduct can have their accreditation revoked. All prime contractors are required to obtain Merlin accreditation within a year of starting their Work Programme contracts.
The Merlin Standard comprises of four main ‘Principles’:
- Supply Chain Design
These Principles are in turn made up of prescriptive ‘Elements’. During the assessment process a score of 1-5 is awarded according to how well the prime meets the requirements of each element.
The average score of these elements informs the total score for each of the four Principles. The prime is subsequently placed within one of four categories depending on the total score for all four principles: Excellent, 85% plus; Good, 70-84%; Satisfactory, 55-69%; and Unsatisfactory 0-54%. However, primes must score at least 3 for each principle to achieve Merlin Accreditation, regardless of their final score.
Merlin assessment scores are published on the Merlin web portal where ‘other providers, commissioners and potential Supply Chain Partners will have access to [the] Merlin report and are free to draw conclusions from it’.
Prime contractors that do not attain a satisfactory score or above (55-100%) will subsequently forgo the reward of increased market share, regardless of whether they are outperforming other primes in their respective CPA. If after three attempts at reassessment the prime is still deemed ‘unsatisfactory’ the case is referred to the DWP account manager to consider breach action and termination of the contract.
The Merlin Standard ostensibly safeguards against some of the concerns highlighted above, including the need to ensure ‘equitable risk transfer, including financial risk, for small, specialist and third sector providers’ and that ‘funding arrangements are fair, proportionate and do not cause undue financial risk for supply chain partners’. It is important that sub-contractors get to know the Merlin Standard and how it is assessed. The best way to do this is by reading the Merlin Standard Assessment Guidance.
Sub-contractors do have another means at their disposal should they wish to raise a complaint against a prime contractor. The Merlin Mediation Process is available if the ‘Prime Contractor’s complaints handling procedures have failed to achieve resolution’.
NCVO are keen to hear about sub-contractor experience of the Merlin Standard and any ongoing disputes with primes contractors. Simply contact Ramzi Suleiman on email@example.com or 020 7520 2472.
The Department for Work and Pensions has published details of prime contracts on the Contract Finder website. To view the contracts, search for 'Work Programme', select 'this exact phrase' on the advanced search options and 'show only contract documentation' on the quick filters. To view each contracts details click on the required prime contract and then click the 'Contract documents' tab. Here you have an option to download a .zip file containing multiple documents.
To see what organisations are proposed to deliver the specific elements within the prime contract simply open the file named 'Annex 2'. In some cases there is also file marked 'subcontractors' which lists the sub-contractors within the prime's supply-chain.
It is worth taking few minutes to check the details of your respective prime contract if you haven't done so already. Check the information provided against your own understanding of the agreement you have entered into with your prime provider. Please let us know if you encounter any discrepancies, or if you've experienced any pleasant suprises.
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