SHAW TRUST – WRITTEN EVIDENCE (PSR0101)
1.1 Shaw Trust is a charity that aims to help people improve their life outcomes, and be the best they possibly can. We do this through employment, education and care services. We take great pride in advocating for the social changes required to ensure that the people and communities we serve are protected, strengthened and able to improve their circumstances.
1.2 We primarily help people with complex needs, whether it is because of social, economic or disability barriers, through a range of services, such as apprenticeships, careers advice and our children’s homes. We partner with national and local organisations to maximise the positive impact to our beneficiaries, meet local needs and nurture sustainable communities and supply chains. Shaw Trust seeks to draw on its frontline programme delivery experiences to influence public policy for the benefit of those we exist to support.
1.3 Our response to this timely inquiry focuses on the lessons that can be learnt from Covid19 specifically in regards to public sector commissioning and delivery.
2. Executive summary
2.1 Covid-19 has shone a harsh light on the state of public services, the impact of austerity, and the need for additional capacity alongside a focus on efficiency.[1] Pre-Covid, there had been a recognition among the majority of political actors and wider public that a vision for post-austerity public services is required.[2] There was a rising demand for public services after a decade with pressure mounting on acute provision. This trend is due to accelerate in coming years. Moving forward, we hope the increased willingness by commissioners to be more flexible, less transactional and more partnership-minded, during the pandemic will set the conditions for a decade of innovation in public service delivery.
2.2 Recommendations
- The Outsourcing Playbook should be fully incorporated into the forthcoming Green
Paper on procurement and then into law. Incorporating the Playbook into the Green Paper and expanding its reach to the wider public sector will help ensure everyone who procures goods, services and projects for government at all levels are working to the same standards and processes.
- There should be a formal review of lessons learnt in commissioning from Covid-19. This should be carried out by the cabinet Office outsourcing team, who will require additional funding. The review should be used to spread best practice and be included in the next revision of the playbook.
- Consideration should be given to strengthening the Social Value Act to ensure social value is being considered appropriately in all public service commissioning and that barriers to civil society entrants are eroded.
- Government should consider establishing priority social value standards for departments in order to pursue select, strategic cross-government objectives.
- Current employment support provision targeted at groups who are being disproportionately impacted by Covid-19, such as the Work and Health Programme, should be maintained and adapted as necessary post Covid-19, to ensure that those groups who faced employment inequality gaps pre-Covid continue to be supported.
- Government needs to act quickly to upscale employment support. We believe that a targeted employment programme should be commissioned to support young people. This will be key to delivering the government’s ‘Opportunity Guarantee’ for young people.
- Government should improve pay in the social care sector – social care wages should be lifted to the level of the real Living Wage
3. Introduction
3.3 The signs that the current model of public service commissioning is not working were present pre-pandemic. There has been a ‘race to the bottom’ on price in an overcrowded marketplace that too often puts people behind profit. The focus on price over the last decade has meant ‘the basic efficiencies available through tendered competition have already been secured. That particular well is empty[3]. Excessive transfer of risk and low margins has impacted behaviour, strategy and delivery in recent times of both private and voluntary organisations, in a way that doesn’t work for the people they exist to help. The relationships between commissioners and providers has become overtly transactional. Procurement, mixed with cast iron processes, is stifling reform and innovation[4].
3.2 Current models of public service commissioning have led to a ‘race to the bottom’ on price in an overcrowded marketplace - in essence, the market too often meets the commissioner’s need and does not meet the beneficiary’s actual need. Tim Harford’s incisive article in the Financial Times about why we fail to prepare for crisis has some pertinent lessons for public services[5]. Harford talks about drives for efficiency in the health sector as an example. He quotes Margaret Heffernan, the author of Uncharted, who writes about the importance of having a buffer – “on a good day, having 100 per cent of your intensive care beds in use looks efficient. The day a pandemic strikes is the day you realise the folly of efficiency. You’ve got to have a margin”. The same logic can be applied to public sector commissioning where for many services this buffer was not in place and public sector contracts were not fit for purpose in the changed world we have found ourselves in when the pandemic struck. Moving forward commissioning must find the right balance and have the flexibility in-built, so contracts our fit for purpose as the external world changes.
3.3 However, the coronavirus pandemic, alongside recent Cabinet Office action,[6] has illuminated a pathway we must take going forward in regards to public sector commissioning.
4. Commissioner response to the pandemic
4.1 Shaw Trust are the largest third sector provider of employment support services to the DWP. The immediate approach the DWP has taken during the Covid-19 pandemic was exemplary when viewed across government, especially for the pace at which it acted to
ensure outsourced provision remained sustainable. The Department recognised early that the crisis made many contract conditions and payment mechanisms untenable. This flexibility has meant that Shaw Trust and the sector providers are able to best support their beneficiaries in the short term and remain as a viable sector in-being ready to play a crucial role in supporting people back to work through and after the crisis.
4.3 In particular, The Department’s relaxation of contractual and payment terms in line with the Cabinet Office’s initial PPN 02/20 (and further PPN’s) guidance is something that will not only be beneficial during this period, but also beyond.[7] This change of approach has led to some important lessons that can be taken forward and continued, where appropriate, after the Covid-19 crisis. The Work and Pensions Committee’s recent report on ‘the DWP’s response to Coronavirus’ includes a host of important findings and recommendations relevant to this inquiry[8].
Lessons learnt from adapting public services during the pandemic
4.4 Covid-19 has shown from a service delivery perspective that what many deemed to be impossible is in fact possible. There are countless examples of where organisations were unable to do something (perhaps through preference), or were told something could not happen before, but since the pandemic struck, these very things have happened and at pace. Examples include the relaxation of contractual terms, GPs working remotely or WhatsApp imposing a limit on forwarding messages in order to combat fake news. Commissioners and funders alike also have a renewed appetite for change. This focus, collaboration and breaking down of perceived barriers must continue post-pandemic.
4.5 Shaw Trust believes in many cases the pandemic has strengthened relationships between commissioners and providers. This can be built upon, with both parties having an improved understanding of what is fair, what the actual cost of delivery is, and what needs to be done to put beneficiaries first. In particular, lessons around appropriate risk transfer, contractual terms and inter-contract and inter-provider flexibility should be taken into account. The advantages of ‘should cost’ modelling should also be considered at the beginning of contracts to assure commissioners of provider model quality, and the need for flexibility on delivery of contracts rather than prescriptive inputs.
4.6 Covid-19 has illustrated the positive impact of rebalancing the contract relationships between providers and commissioners. A healthier model going forward would see a shift from a ’market’ approach, to an approach based on outcomes, centred on reciprocity, mutuality and trust, all of which drives social value and serves the needs of people first and foremost. This relies on greater trust between commissioner and service delivery partners, as well as appropriately priced contracts.
The Outsourcing Playbook
4.7 The green shoots of progress on public service commission were visible pre-Covid, and the direction of travel required has been cemented by the lessons we can learn from Covid19. The roots of these green shoots are visible in the Cabinet Office’s ‘Outsourcing Playbook’ which has recently been revised in collaboration with government providers[9].
4.8 The revised Playbook has built a strong consensus around what needs to be done and has delivered a framework structure that will help lay some of the foundations for a healthier sector that delivers for beneficiaries. A central manifestation of this is the recognition in the revised version of social value, which is now referenced multiple times. The revised playbook has a central tenet to play in bringing about the rebalancing of relationships between commissioners and providers. The playbook includes a host of technical guidance around risk transfer, unlimited liability and should cost modelling which are important, but this is only part of the solution and should be framed by an approach to commissioning based on reciprocity, mutuality and trust.
4.9 Recommendations
- The Outsourcing Playbook should be fully incorporated into the forthcoming Green
Paper on procurement and then into law. Incorporating the Playbook into the Green Paper and expanding its reach to the wider public sector will help ensure everyone who procures goods, services and projects for government at all levels are working to the same standards and processes.
- There should be a formal review of lessons learnt in commissioning from Covid-19. This should be carried out by the cabinet Office outsourcing team, who will require additional funding. The review should be used to spread best practice and be included in the next revision of the playbook.
- Consideration should be given to strengthening the Social Value Act to ensure social value is being considered appropriately in all public service commissioning and that barriers to civil society entrants are eroded
5. Who should deliver public services
5.1 We think it important that the public understand who is delivering their public services. The US writer Suzanne Mettler coined the phrase ‘submerged state’ to describe how wellmeaning leaders, under intense fiscal and political pressure, deliberately obscured the role of government, leaving citizens less aware of costs and benefits and unable to form reasoned opinions[10]. If the public had knowledge and confidence in providers they know to be socially driven organisations, committed to funnelling profit back into delivery, then this may have significant beneficial knock-on impacts. The public would better understand the benefits of public services in their community and where their tax is spent. Commissioner would have more confidence in taking flexible approaches knowing the public understand the service. Providers would be able to innovate as well as be even further integrated into the community. Most importantly, beneficiaries would be able to get better support.
5.2 As government look to rebuild the economy, there will no doubt be a number of services commissioned, from employment support programmes to large scale infrastructure projects. The government has a choice of where it invests its money and therefore should take an active interest in where that money goes. A 2019 report by think tank Demos showed for example that 25 of the government’s 34 Strategic Suppliers (73.5%) have operations in tax havens[11]. Central government and wider commissioners have the opportunity to use procurement to in itself bring about a fairer economy. More deeply embedding social value into the procurement process for the provision of services has the potential to not just create a fairer economy but also one in which taxpayers are getting the best value for their money as money made by providers focused on social value will then be reinvested into the
services commissioned. For example, as a third sector provider, profit made from public sector contracts is either reinvested into the services we deliver or into our community projects, through the Shaw Trust Foundation. Commercially astute not-for-profits, can offer taxpayers and wider society, value for money, with government money going back into the community rather than being extracted to shareholders. Value extraction versus value creation must be a key consideration for public service commissioners.
5.3 Recommendations
- Government should consider establishing priority social value standards for departments in order to pursue select, strategic cross-government objectives as previously recommended by Demos[12].
6. labour market inequalities and Covid-19
6.1 Societal and economic trends and inequalities apparent from pre-Covid 19 should not be ignored; they will be much exacerbated post Covid. The impacts of the Covid-19 pandemic and accompanying recession will be felt in various forms, but the shockwaves sent through the UK labour market are set to be some of the hardest felt.
6.2 The DWP and the employment support sector have a major role to play in addressing the UK’s labour market challenges and getting people into work. Post Covid-19, we must not lose sight of supporting specific groups who faced significant employment equality gaps pre Covid-19, for example people with disabilities and health conditions and young people. The continuation and development of specific, targeted, accessible employment support, as well as new provision that specifically responds to the impact of Covid-19 will be required.
6.3 Research to date shows that inequality gaps are being exacerbated by Covid-19. For example, Resolution Foundation analysis has found that that young people are most likely to work in sectors that have been shut down because of the coronavirus pandemic. More than 40% of employed 16 to 24-year-olds work in sectors hit by lockdown measures introduced by the government.[13] Meanwhile, ONS data shows coronavirus is disproportionality impacting disabled people.[14] The disability employment gap could be extended further by the current crisis, and its aftermath, as a very large number of newly unemployed people[15] chase fewer vacancies.16 Disabled people, who may already face long term barriers to employment, could be pushed even further away from entry into the labour market during the pandemic, and in its aftermath. We know that when a disabled person falls out of work for an extended period of time, they are more likely to struggle to return to the workplace, and are twice as likely to remain unemployed when compared to non-disabled people.[16]
6.4 Covid-19 has hit some sectors much harder than others. For example, hospitality, nonfood retail and leisure industries – sectors which are often an entry point into the labour market for young people. Jobs in other sectors, such as health, social care, and key public services, have held up (or even increased). It is likely that these sectors may continue to grow, while some of the aforementioned sectors may never fully recover, thus fundamentally altering our economy. At the same time, sectors that have a disproportionately high number
of EU nationals working within them, for example nursing, are likely to be affected by Brexit and will struggle to fill their vacancies in coming years.
6.5 The disproportionate impacts on certain sectors and the stabilisation or growth in others needs responding to. We think it is important that there are sectoral route ways into key sectors and those with outstanding vacancies. Shaw Trust recently launched a Care Academy in response to the urgent need to recruit and retain care workers, assisting the government’s recruitment drive. It exemplifies the approach we believe both government and providers should take to create sectoral route ways, at both national and local levels, allowing jobseekers to gain roles in key sectors, where there is demand for labour.
6.6 The Resolution Foundation, in their recent report ‘The Full Monty’ suggest that significant public investment is needed to deliver job creation at the scale, and of the form, needed[17]. They propose an increase in spending on social care by £5 billion in order to create an additional 180,000 workers, which would bring the ratio of care workers to the over-70’s population back to its 2014 level.
6.7 With social care, creating the jobs is only one half of the problem, with the sector already struggling to fill existing vacancies. Shaw Trust’s Care Academy has the ability to support people into the sector and then progress in the sector aiding retention. However, to attract more people into the sector, a step change is needed. Facilitating a move to the real Living Wage across the social care sector should be the beginning of this process.
6.8 Recommendations
- Current employment support provision targeted at groups who are being disproportionately impacted by Covid-19, such as the Work and Health Programme, should be maintained and adapted as necessary post Covid-19, to ensure that those groups who faced employment inequality gaps pre-Covid continue to be supported.
- Government needs to act quickly to upscale employment support. We believe that a targeted employment programme should be commissioned to support young people. This will be key to delivering the government’s ‘Opportunity Guarantee’ for young people. - Government should improve pay in the social care sector – social care wages should be lifted to the level of the real Living Wage