THINK TANK - The Ideas Zone....!!!, Welfare to Work

DWP told to fulfil its Market Stewardship role and to clarify what constitutes fair treatment of subcontractors.

As we move towards the Work programme there are valuable lessons to learn and there is much that we can build on.

It s a while ago, but I think it is still very relevant.  On 3rd March 2010 The House of Commons Work and Pensions Committee published its report on the Management and Administration of Contracted Employment Programmes. The Committee examined DWP Commissioning Strategy and FND in 2009.

One of the conclusions drawn was that whilst DWP saw itself as having a “market stewardship” role “there was no evidence of this happening in practice’. The report examined several examples of potentially unfair treatment of sub-contractors and added ‘….Whilst we do not know how widespread this problem is, neither does the Department and we call on them to clarify what constitutes fair treatment of subcontractors and ensure that prime contractors meet these standards. [the statement goes on]………the Department has shown no willingness to get involved with even the most serious cases”.

However in response to the question;

“…If there was evidence that a subcontractor was not making enough money to be able to run the service that they were providing, [or if] they were effectively subsidising the work that they were doing as part of the contract from other sources of income, would you ever want to be involved in that?”

Alan Cave responded;

“If that situation were arising because of a breach of a code of conduct, we would be involved.

Again the commercial relationship is with the prime contractor. They are responsible for delivering what that contract needs to deliver in totality, so we hold the prime contractor to account for that”.

Mr Heald: In Glasgow we met one company who had been delivering a particular contract for seven years, they did not get the subcontract, and now what has happened is the large prime company has taken over their offices and their staff and so they have lost out. Is that not a bad example to be setting?”

Mr Cave:That is an example of competition, is it not? They have lost to competition and the consequence of that is that the prime contractor who ran the competition has had the staff and the..”

Mr Heald:This is exactly the attitude that I was hoping you might push back on. In Scotland one of the things that rather surprised us was that in the first round of Flexible New Deal the three prime contractors who had put in had each named the other two as their main subcontractors, so it did not matter who won, the big boys did. That is what worries us. Some of these small organisations which have done very good work and which are the most innovative in the niches and really delivering on the streets may end up getting parked”.


VERY Interesting……  we need to be mindful of this.  See our piece on “Threshold Providers”

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