Under the previous administration the preferred model for funding welfare to work provision was one where the risk was transferred to Prime contractors and then to the wider provider base. This model is theoretically workable however; the unit costs associated with the current tranche of flag-ship programmes like FND 1 and 2 and PEP render the model almost financially unworkable.
Prime contractors will utilise their service fees to kick start the process and alleviate some of the cash flow difficulties that they and their sub-contractors will encounter.
Whilst there are risks throughout the whole supply chain, smaller providers and sub-contractors find themselves in a precarious position wanting to participate but feeling and believing that they cannot afford the risk of participation or indeed of non-participation. As the old adage says; ‘they are caught between a rock and a hard place’
But are the risks really so high?
Are providers failing to see the light at the end of the tunnel?
