Challenges and Opportunities, by David McDougall

Introduction

The Department for Work and Pensions (DWP) launched a new commercial agreement last week for Employment and Health Related Services (CAEHRS). This new Framework replaces the existing Umbrella Agreement, which expires in January 2021. CAEHRS will be the primary mechanism used to procure DWP’s future strategic objectives over the next four years. The Framework is designed to facilitate the provision of Employment and Health related services to the government and other contracting bodies in England, Wales and Scotland. It will operate for a maximum of five years, with a potential maximum value of £7.5 billion.

The current economic climate is evidently different to when the last Framework was procured five years ago. The impact of Covid-19 (with the full impact still unclear) means that unemployment has reached unprecedented levels, and Brexit is forecast to increase unemployment in the short to medium term, as the UK adjusts to the impact of leaving the EU. Even before Covid-19, the UK only narrowly avoided entering a recession.

What does this mean for DWP? The market has evolved since DWP last procured a large scale employability service (Work Programme) in 2012. Only a handful of Work Programme Prime Contractors still operate in the employability market and a lot of knowledge and skills has been lost. Given the current economic crisis, developing a market and attracting new entrants will be a challenge, but also provides a potential opportunity for new ‘players’.

Changed, changed utterly

The nature of the economy has also changed. Growth in the gig economy, self-employment and a demand for a greater work-life balance has created a more flexible labour market.

We believe that the help and support offered to customers, needs to change significantly. Wage progression linked to conditionality underpins the principles behind Universal Credit, meaning customers will require upskilling once they enter employment… so offering a wider range of post-employment support will be a fundamental part of any new service.

Many customers working in certain sectors, for example service/hospitality, have been adversely affected by Covid-19 and will need extra support and re-training to access alternative employment. Youth unemployment continues to rise and must be addressed urgently if we are to develop a new post-Brexit workforce.

Organisations looking to tender for future programmes will need to demonstrate that they possess the core functions required to deliver a quality service. This includes technology, links to employers, strong stakeholder links, skilled workforce and quality assurance processes. Experience shows that organisations tend to be good at some of these things, but rarely all of them.

Start your Engines

The indications are that these new challenges will require a new approach, and a different programme will need to be developed. Both Government and DWP acknowledge the need to procure programmes on a larger scale to meet these challenges.

This is, of course, only the tip of the iceberg and there are many more factors to consider including:

• How today’s provider network will respond to the challenge of higher client volumes
• Standardisation versus local models;
• The involvement of devolved programmes;
• Technology
• and more…

We’ll be taking a look at these issues in a short series of pieces over the next two weeks.

David McDougall, Senior Associate, 50 Degrees

David is an experienced and respected business leader who has worked in a variety of operational and strategic development roles across the Employment, Skills, Justice, Health, Economic Development and Regeneration sectors.

To find out more about how we can help in this space, please get in touch:

Matt Wells, Head of Business Growth, matt.wells@the4oc.com, Ph: 07985 420 111