From education to employment

A shopping list for the next government

I like to think that I am a pretty canny shopper. I have honed these abilities over the years so that I know exactly the best time to pop into the House of Fraser sale (given you ask, when there are significant reductions, but before the good stuff has disappeared). The key I find is to have a clear idea of what I want to buy and the value of what I’m being offered. Too cheap and I’m suspicious; too expensive and I walk away.

In my role as ERSA Chief Executive, I have also learnt something about how to shop for the best employment services for the long term unemployed. Commissioner decision-making about the design of services (what to buy) and the method of procurement (how they buy it) is crucial, which is why commissioning is the first point in the ERSA Manifesto.

ERSA has thought long and hard about what’s important in the commissioning of employment support services. Services need to meet the needs of jobseekers, but also the requirements of employers. At the same time, particularly in this age of austerity, they need to provide value of money for the taxpayer. In effect, therefore, there are three different customers, all of whose needs must be met by the services commissioners’ buy.
Given these competing pressures, it’s essential commissioners have a good shopping list. There might be trade offs between items on the list, but they need to have a good idea of what they want, why they want it, where to get it and what it’s worth. Being a sector body of course, we have strong thoughts on what should be on that shopping list, which we’ve been sharing widely with political parties and civil servants.

  • First, of course, you have to be clear about the right level at which services should be commissioned. Our view is that we should retain national commissioning for the biggest programmes, but there needs to be far stronger local input. In effect that means giving local authorities (or groups of authorities) some chance to influence programme design, some input to the assessment of bids and then a role in scrutinising outputs.
  • Secondly, adopt a realistic pricing model. It doesn’t matter what level services are commissioned if there isn’t enough money in the system to meet jobseeker needs. We’re on record as saying that there isn’t enough money currently for jobseekers on Employment and Support Allowance. Actually, there might be enough cash, but it isn’t in the right places – it’s spread across health, skills, employment and social care budgets and isn’t always being used in the best way to help the individual. In addition, it’s about payment model as much as overall money available. You can retain some level of payment by results (PBR) in a scheme, but it would be a mistake to think you can run a thinly resourced pure PBR scheme for those furthest from the labour market.
  • Next, make sure programme design incentivises services to work together around the individual. We know that many of the services that jobseekers furthest from the labour market need are actually delivered at local level. How do we therefore give local authorities, health bodies or skills providers ‘skin in the game’? The answer is probably complicated – align objectives and targets across sectors and agencies and share budgets and/or milestone payments and outcomes. All of this challenges government. All of this is necessary to help jobseekers.
  • And finally allow innovation, but ensure standards. All the evidence we see is that the ‘black box’ is essential in the effort to personalise services. However, we also know that roles and responsibilities can be opaque and service quality can be questioned. Future programmes need to avoid over prescription which too often hurts delivery, but allows transparency of standards.

Obviously, this isn’t an exhaustive shopping list. Indeed, our list goes on for pages. However, we do think future commissioners need to buy these essentials. What we don’t want is future commissioners buying the wrong things in a hurry then finding that their cheap deal is the wrong fit.

Kirsty McHugh is chief executive of the Employment Related Services Association (ERSA)

The ERSA website will be hosting blogs about commissioning for the next few weeks – join the debate here

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