Parking by place

Concerns about creaming and parking in welfare-to-work programmes are not new and have resurfaced in the last month or so, particularly in relation to clients with specific disadvantages and how well they are being served by Work Programme providers. Richard has recently written about this topic. In this context it is important to consider the size-specific risks that larger contracts have associated with them and how these can be mitigated. One of these risks is the creation of selection bias through ‘parking by place’.

The argument has long been made that increasing the efficiency of welfare-to-work programmes requires contract parameters that offer economies of scale and encourage investment in infrastructure. Indeed, it is the UK’s history of fragmented and small programmes that the New Deal, Employment Zones and the Work Programme were designed to counter. Prior to interventions on this scale, it was not unusual to find multiple organisations set up to deliver multiple employment programmes in any one area, all targeting similar funding streams, clients and employers, and thereby creating significant confusion and overlap. In Glasgow there were over 500 separate programmes at one point, and the city was far from unique in this respect.

The prime contractor model was developed as a method of delivering local accountability within a national programme. Its advent in Flexible New Deal and now the Work Programme saw discussion focus on how government could direct the market to find the appropriate balance between exploiting economies of scale in service delivery without losing the value of local knowledge or specialist skills (often through sub-contractors).

Parking happens when a prime contractor is able to meet their performance targets without fully engaging all communities –they slow-track or ‘park’ those they deem least likely to move into work. Parking by place occurs when a provider effectively limits service provision to an area within their wider district by placing minimal or no resource there.

This reduces the likelihood of people from that neighbourhood engaging in the programme. In reality this might mean those living in certain areas, or indeed certain towns, have a difficult journey to access services, discouraging all but the keenest from attending appointments. This has an important impact on performance. Internal analysis from a leading provider shows, as you would expect, that those clients who turn up to their first appointment without requiring further prompting are significantly more likely to move into work.

If performance targets (and the underlying funding model) have been set in such a way that it is possible for the provider to meet or exceed offers without fully engaging all communities then this creates perverse incentives for providers seeking to maximise outcomes. They can ‘park by place’ by providing services in the sections of their district where they think they will see the biggest return in terms of job outcomes. At a time when inequality is a big issue both socially and politically, it is problematic on many levels to have a welfare-to-work programme that does little to address, and may ingrain, existing place-based inequalities.

Of course, the lack of publicly available performance data for the Work Programme means that we do not know the extent to which parking by place is happening. Whilst we do not have this data, the DWP could do this analysis by identifying whether geographical hotspots exist – areas from which clients are less likely to attend interviews, less likely to be chased up and less likely to move into sustainable work – and asking providers what they are doing to address this.

However, the reality is that parking by providers should be addressed at the contract design stage through the funding model and performance measurement mechanisms.

‘Parking by place’ is not, and should not be, a debate about whether to locate operations where the client base lives or where the jobs are – that is and must be a local decision. It is instead a question of how you ensure the contract area is ‘covered’ – that every client irrespective of level of individual disadvantage or geographic location is given the support and help they need to gain sustainable employment.

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