Clause 15
Welfare Reform Bill
11:15 am
John Penrose (Weston-Super-Mare, Conservative)
I thank my hon. Friend for giving me a great lead into my next points. It is vital to look at how things need to change and what best practice should be. I hope that the Minister can give us examples both of what has happened since the period to which those quotes referred and what he expects to happen in future. We are dealing with a complicated situation, yet we have a series of commissioning decisions and activity that, at their worst, seem to be better suited to a commodity market, where things are primarily decided on price, rather than on the quality of the service and the variety of the service being provided. It also seems better suited to a series of large providers which can cope with the bureaucratic demands that are being made upon them and are big enough and serious enough to be able to stand toe to toe and eyeball to eyeball with an organisation of the scale of the Government in a contracting negotiation.
Clearly that is not the sort of organisation that we have—I have just described some of them. Many are led by inspirational individuals, employ five or six people and focus on, for example, dealing with the employment problems of people who are partially sighted in Doncaster. That set of behaviours has to change if the Government are to achieve their central aim of developing capacity and the ability of the organisations that are providing those services to grow and to provide yet more services in future.
The Government have already accepted the notion that there is not sufficient capacity out there atthe moment. They have said that they will have the equivalent of a mixed economy in that they are expecting to provide some services in future via contracting and contracted-out organisations. At least to start off with, a proportion of the services will be provided by public sector employees in the same way as the pathways to work pilots have been. That is an acceptance of reality and makes enormous sense.
If the Government want to expand the amount of contracting at any point in future, they cannot do so unless they have taken the necessary steps to improve their commissioning to build the capacity of those other organisations. That will mean satisfying some of the proposals contained in a report from Oxford Economic Forecasting in late 2005 commissioned by the Employment Related Services Association. It made several recommendations. It said that, when contracting with people, the DWP should avoid overly short small contracts and protracted decision making, that it should allow sufficient time for implementation and that it needs to rebalance the risk between procurers and providers. I would add that it is probably vital, if we are to grow capacity, that contracts are priced fairly. We are talking about public sector money and we have to get value for money. Care needs to be taken that we are not pricing things at the marginal cost. They need to be at full cost if we expect any of these organisations to grow successfully.