Buying Quality Performance

We start with the basic premise that virtually everyone is better off in work. If that is the case, incapacity assessments should be geared to maximise the number of people leaving benefit for employment (as opposed to being transferred to lower levels of benefit). This second part of an examination of these assessments considers how clever contracting could create the conditions for a learning, personalised, efficient and effective service.

The objective is leaving benefit for meaningful employment, not shifting to a benefit that costs the state less money. Simply forcing people from Incapacity Benefit or ESA onto JSA, or simply removing their Disability Living Allowance, apparently achieves a short-term saving but does nothing to address the social exclusion and concomitant long-term costs of long-term worklessness. Indeed, it may even exacerbate that exclusion and raise that cost.

In order to deliver this gearing of higher employment outcomes, the assessment must be closely aligned or linked with back-to-work assistance. At present there is a process for referral to the Work Programme for people at various trigger points, but the individual must still pass from assessment back to Jobcentre Plus and then onwards to the Work Programme provider. It is a protracted, disempowering, disheartening process. Closer alignment could be achieved in a number of ways, including:

• Direct transfer of an individual’s personal details from assessor to Work Programme provider;
• Co-location of assessment and back-to-work support; or
• Conflation of the two contracts/services into one.

If the two contracts were brought together, then payments to the providers could also be aligned: with fixed payments for each assessment conducted and outcome-based payments for any subsequent sustained employment.

The concern raised may be that such a model incentivises providers to place people into jobs that they don’t want or, more importantly, that are detrimental to their wellbeing. And if a ‘black box’ approach was used, in the way that this has been applied to the Work Programme with inadequate performance reporting, it would be hard to mitigate this risk. There are, however, three possible solutions

1. Changing the benefit structure

• All unemployed claimants, incapacitated or otherwise, to receive a single benefit, and allowances added to compensate for additional costs directly attributable to particular conditions and consequent expense (possible under Universal Credits);
• Additional living allowances to be continued when someone is in work;
• Flexibility to be introduced in the bureaucracy of benefit processing so that someone can return immediately to their benefit if a temporary position comes to an end or they lose their job.

In this way, assessments would be focused on ascertaining requirements for extra expenditure for identifiable resources or activities. These costs could be disassociated in perception and actuality from being in or out of work. And the fluctuating nature of some conditions/disabilities can be considered.

2. Benchmarking quality and performance

Quality and performance could be enhanced through using comparative measurement to reward good providers. With multiple providers and transparent reporting, there could be regular benchmarking, looking at:

• Turnaround times;
• Number of appeals;
• Outcome of appeals;
• Number of employment outcomes;
• Levels of sustainability;
• Time taken to achieve employment; and
• Cost of assessment and subsequent assistance.

Variation between locations needs to be accounted for – and this can be done statistically in a number of ways.

Multiple providers in single areas obviously enables direct comparison, and business volumes can be easily redirected from one provider to another as a reward/punishment for performance. In some areas, however, multiple providers are simply not commercially viable and where they are introduced there is always a multiplying of overheads.

The most effective rewards to drive up quality performance of such a service are likely to be a combination of:

• Enhanced payments for the higher performers, perhaps with each quartile of the ‘league table’ allowed to draw down different levels of profit;
• Contracts reviewed every three years with performance determining new contract awards and/or volume transfers.

The population of claimants will change over time, as their number changes and as the labour market shifts between economic cycles. This reinforces the need for a system based on transparent performance reporting and benchmarking, with ‘learning contracts’ varying the levels of payments over time, and also possibly varying the relative weighting of the service features contributing to the league tables.

3. Rigorous and inclusive quality assurance

A common standard of assessment would be required, utilising a core set of tools, with minimum standards of service quality and effective monitoring.

There is also a further layer of powerful quality assurance that could be wrapped around these services/contracts. This would incentivise both service users and providers to engage with the quality performance of delivery. It could establish as a fundamental principle the link between personal wellbeing and employment. It could be the difference between provision of such interventions being shaped and perceived as carrot or as stick.

This uniquely powerful driver is the input of the service users themselves as evaluators of the service.

The service might be defined as: 1) administration of a nationally-set process to verify the need for additional resources or support, and therefore allowances, 2) assistance to agree a realistic job goal, 3) assistance to secure employment, 4) support in-work to sustain that employment, and 5) assistance in the event of lost employment. A clear definition of its objectives impacts on the way users interact with the service – asking the right questions sets the context. Users would be asked to evaluate their satisfaction with the service, on each of these 5 points (as relevant).  This user rating can then be weighted heavily in benchmarking, impacting on payments to the provider. The provider is then incentivised to view the user as a co-creator of the service, and the user is directed to attach value to the steps back to employment.

It is possible, if not necessary, to reframe these contracts on the basis of a reconsideration of the wider purpose of the services they procure. Having reframed them, the contracting model can be re-evaluated to increase quality performance. It is also an opportunity to use the strength of user empowerment to move away from enforced dependency.