How open public services is a way to outsource unpopular policies

In this recent series of posts we’ve been exploring the tensions between two competing Government agendas – for so-called ‘open public services’ and ‘open policy-making’. The former is supposed to improve public services by widening the choice of providers, while the latter is meant to improve policy by widening the range of voices that influence policy. These ‘tensions’ aren’t necessarily undesirable for policymakers – outsourcing can be a useful way for Government to ignore the views of those on the frontline when these views conflict with its policy agenda.

Last week Atos was appointed to carry out assessments for the new Personal Independence Payment (PIP) securing two contracts worth over £400 million. PIP is the new benefit to replace Disability Living Allowance from April 2013 for new claimants (with existing claimants migrating onto this benefit by 2016). This decision has proved to be highly controversial because of Atos’ £100 million a year role in the Work Capability Assessment (WCA). The WCA is the main assessment for Employment Support Allowance (ESA) claims.

The WCA has been a public policy fiasco, which has caused real anxiety and fear for people who have been forced to go through this process, as highlighted in recent documentaries by Panorama and Channel 4’s Dispatches. The media has been littered with examples of people who clearly should not have been found fit for work. According to an Early Day Motion last year, 1,100 claimants died while under compulsory work-related activity for benefits and a number of those found ‘fit for work’ and left without income have committed or attempted suicide.

As a result, there is considerable fear, distrust and anger amongst disabled people towards Atos, and the company has faced serious criticism from campaigners, charities and the media for its role in the policy. However, the concerns of disabled people have clearly not featured in the decision to commission Atos to deliver PIP – indeed, they have been dismissed.

Perhaps this is because the problem is the policy, not necessarily the provider. Charities and commentators have argued that the process is flawed, the tests are too impersonal, take little or no account of the wider circumstances and motivation of a person, and that the fluctuating nature of some conditions is not sufficiently taken into account (charities have instead called for a ‘Real-Life’ Assessment rather than a one-sized fits all approach). GPs at their annual conference in May called for the WCA to be scrapped because the assessments are “inadequate” and “have little regard to the nature or complexity of the needs of long-term sick and disabled persons”. They called for the tests to be replaced with a more “rigorous and safe system”. Of the 390,000-plus appeals that have been lodged against decisions not to grant the benefit, just under 40% have been successful. By some estimates the appeals process has actually cost more than the value of the Atos contract to deliver WCA.

Helpfully from the Government’s point of view, criticism of the role of Atos has often obscured concerns about the policy itself, in spite of the fact that the design of the assessment itself is the problem. Professor Harrington was appointed to review the process and recently announced that he is quitting after his third review is completed. Paul Farmer of MIND also stepped down from the Harrington Scrutiny Panel, highlighting a variety of concerns about the WCA. The WCA contract was a poisoned chalice and any provider delivering this contract would have faced similar criticisms.

The policy has also had serious implications for another initiative, the Work Programme (discussed in previous posts), with the flow of customers in receipt of ESA significantly below the estimates provided by DWP to bidders when commissioning the Work Programme. The scale of appeals against WCA decisions has created this logjam in the system, which was not anticipated. The effect of this has been that many charities in the Work Programme who expected to work with ESA customers have seen little or no referrals, whilst the financial models of primes have been affected given that this customer group attracted the biggest financial payments.

Work Programme providers are also required to recommend customers for benefit sanctions – this is an integral part of the design of the programme and providers face consequences if they don’t carry out this aspect. As with WCA however, it is providers who have faced criticism (in this case for their role in sanctioning customers) when the design of this sits with the Department for Work and Pensions. Sanctions are a policy decision and they can only be implemented by DWP – they are not a provider decision.

The outsourcing of both PIP and WCA are examples of the Government’s open public services agenda in practice, whereby public services are opened up to greater competition from the private (and to a lesser extent voluntary) sector. Previously both the WCA and PIP could and would have been delivered ‘in-house’ by Jobcentre Plus. But with outsourced provision, badly designed policies such as WCA and the Work Programme can lumber on while the media and others focus on what’s ‘gone wrong’ with a particular provider. What price open policy then, when providers are effectively being paid to cover for poor policies – at least for a while?

What does the Work Programme mean for open policy?

In this recent series of posts we’ve been exploring the tensions between two competing Government agendas – open public services and open policy making. In this post we examine these tensions in more detail, using a flagship Government policy – the Work Programme to tackle long-term worklessness.

The Work Programme is regarded by Government and others as a model of outsourcing that should be replicated in other areas of public services. The Economist magazine has predicted that £58 billion of public services will be outsourced by 2015 as part of the Government’s agenda for ‘open public services’, on top of the £82 billion already outsourced (according to Oxford Economics). Much of the comment surrounding the Work Programme has focused on what it means for the future of outsourcing – but what does it also suggest about the potential for open policymaking?

The Work Programme is a £5 billion initiative that has been heralded as the most radical attempt by UK government to address long-term worklessness. It is based on the principle that government will get out-of-the-way and will financially reward providers who perform. The Government has argued that delivery of this programme should be outsourced rather than delivered in-house, because this will drive innovation and significantly improve performance compared to previous programmes such as Flexible New Deal. Responsibility for both delivery and risk has been transferred to large generally private prime contractors who are largely paid on results, that is the number of people entering into work and keeping their job for up to two years.

However, one of the striking things about the Work Programme, given its size and remit, is the lack of publicly available performance data. This seems to run counter to what the Government has said about the importance of open data, transparency and now open policy. For example, the Government’s Open Public Services White Paper states that ‘Provides of public services from all sectors will need to publish information on performance and user satisfaction’ – yet the same emphasis isn’t always apparent when it comes to this flagship Government programme.

Effective transparent scrutiny of the Work Programme is difficult because providers are not able to share data about what is working and what isn’t. They are required to sign comprehensive contracts, which prevent them from sharing performance data unless it is already in the public domain. Provides face serious consequences if they flout these rules especially if they generate ‘adverse publicity’ for the programme. Nonetheless, some data have trickled out, and the first analysis of performance was released by the Department for Work and Pensions earlier in the summer. This followed a data set released by trade body ERSA in May. ERSA and the Department estimate that one in four people are going into work after being attached to the programme for six months.

The Government has argued that there are complications in releasing timely data about the Work Programme, both because it is new and because there are customers coming onto the programme all of the time, which can distort the overall impression regarding its performance. The Minister responsible, Chris Graying, in evidence to the Work and Pensions Select Committee in March this year argued that his Department is publishing data about the Work Programme in accordance with Office of National Statistics guidelines covering both what, when and how statistics are published. However, a careful reading of his evidence  might suggest that the ONS rules don’t actually prevent DWP from releasing Work Programme performance data – in other words, that the Department has more room for maneuver than the Minister appears to suggest. We’d be happy to be corrected on this interpretation – if someone from DWP or indeed ONS wants or is allowed to get in touch.

What is certainly true is that it is still very difficult, a year into the Work Programme, to build an accurate picture of whether the policy is in any way on course to deliver against its original objectives. This vacuum of information is creating a lot of unease about the policy. It has been left to the likes of the National Audit Office and the Social Market Foundation to fill the gap – much to the chagrin of the Government. A report from the NAO earlier this year stated that the Government’s assumptions about the Work Programme were over-ambitious, and that only 26% of job seekers would secure work compared to the Department’s target of 40%.

Given the scale of investment in this programme, both political and financial, it is unsurprising that there is so much interest in this policy – and so many demands for more openness and transparency. There are legitimate questions to be answered as to whether the Work Programme is working in the way it was intended. A number of charities have pulled out of the programme whilst others have gone bust because of the financial constraints of the payment by results model used in the programme. St Mungo’s, a well-respected charity is the latest example to pull out after failing to receive any referrals. The NCVO has also raised a number of concerns from their members about how the programme is being implemented. Given this level of public interest and concern, lack of transparency becomes counter-productive – rather than reducing possibly inaccurate comment and analysis, it only serves to increase it.

The Work Programme points to a real tension between the Government’s open policy and open public services agendas. The Government wants to create a vibrant and efficient market of providers for outsourced public services. It also says it wants the performance of providers to be transparent and open to public scrutiny. But if other, equally important areas of provision such as reducing re-offending, public health, skills, and drug and alcohol recovery employ the Work Programme model, this suggests that open policy in public services will be severely limited, and that the public will know less than they should about what their money is funding and what the results are.