Work Programme is leaving charity sub-contractors vulnerable to financial risk
17th January 2012
Charities involved in the Work Programme are not being adequately shielded from financial risk, according to a survey of over 100 voluntary sector sub-contractors we have released today.
Members of our special interest group for Work Programme sub-contractors are voicing concerns that the welfare-to-work initiative in its current form could threaten the sustainability of many voluntary sector providers. Seventy-nine per cent of respondents said that their prime contractor (the organisation appointed to lead on delivering the service contracts) was not adequately shielding them from risk (58 per cent answered 'not at all', and 21 per cent 'only to a small extent').
The group, which is open to all voluntary organisations who act as sub-contractors in the Work Programme, is meeting Employment Minister Chris Grayling today to air their concerns and suggest steps to ensure that the sector is involved fully and fairly within the initiative.
The survey also highlights a lack of faith in the Merlin Standard, a code of conduct for ensuring that sub-contractors are treated fairly by their prime contractor partners. Seventy-one per cent said that they did not think the Standard is adequately regulating prime contractor behaviour (39 per cent answered ‘not at all’, 32 per cent ‘not really’).
Many subcontractors have also fed back that they are not satisfied with the level of Work Programme referrals they have received from their prime contractor. Fifty-eight per cent of Tier 1 Providers and 72 per cent of Tier 2 Providers said they were not at all satisfied with the current level of referrals.
Sir Stuart Etherington, our Chief Executive, said:
‘The prime contractor model is supposed to safeguard small providers from financial risk, but these findings suggest it is currently falling far short of expectations. Voluntary organisations have real value and expertise to offer, so it is crucial to ensure that the sector is involved fully and fairly in the Work Programme. Government must take these concerns on board and ensure that no bad practice is allowed to slip through the net.’
Read the full special interest group survey report (PDF, 951KB).
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Comments
SCOOP Aid Ltd was cited in the tenders of both Sheffield's prime contractors. Both collected copious amounts of information about our financial capacity etc prior to tendering. We were accepted into the supply chain of both SERCO and A4e. We have contracted with neither.
SERCO would not vary from their set financial models which all three of which required an organisation of our size (turnover less than £200k) to run a financial risk which was not commensurate with ouor size.
A4e offered us a financial model which worked but pulled out of contracting with us (at a providers' meeting which they had asked us to attend ) because they were not prepared to guarantee us a base line number of referrals. This was despite them having 16 lone parents on programme which we said we could work with. The response waa that none of their lone parents needed our services. We think this was possibly the point all along.
We have contributed to a previous Chris Grayling beriefing note and are very happy to do so again if this would be helpful.
Best Regards,
Shelli